As noted earlier, there have been changes to the CPS over time that have clarified the estimates of specific insurance classes as well as changes that have affected the measurement of overall levels of insurance coverage. These changes have included the following:
- In the late 1980s, estimates of private insurance were refined with respect to what was employer-sponsored, by broadening the universe of who were asked this question beyond just workers and their family members. In addition, questions were also added at the household level to pick up coverage of children that might have been missed (employersponsored insurance) from outside the household and Medicaid).
- Several major revisions to the CPS occurred in the mid 1990s. Census converted to a CATI/CAPI process, which has been thought to increase detection of insurance coverage. In addition, beginning with the March 1995 CPS, the questionnaire was changed to expand the categories of coverage a person could have. This allowed for a more accurate detection of Medicaid (although it resulted in fewer Medicaid covered persons as the “other government coverage” categories increased), as well as more accurate nonhierarchical counts of persons covered by private insurance (both employer sponsored and individual).6
- In March 2000, the survey added a verification question to clarify the number of uninsured.
- In March 2001 the survey also added a question to pick up coverage under the State Children’s Health Insurance Program (SCHIP).
- March 2002 saw the additional change of weights based on the 2000 Census.
- While the March 2003 CPS saw some changes to such fields as industry, occupation, and racial classification, the insurance portion of the survey remained the same as in March 2002 and March 2001. March 2004 followed the format and classifications found in March 2003.
Although the improvements to the CPS over time have been extremely helpful, they have made it more difficult to model trends over time. In addition, there are specific issues with certain insurance coverage estimates from the CPS - in particular, the reported Medicaid population is much lower than that implied by program statistics from the Centers for Medicare and Medicaid Services (CMS), and lower than that found in other surveys such as MEPS and the SIPP.
Using the most recent surveys (March 1995 through March 2004), we have attempted to adjust for the survey changes, including insurance verification and SCHIP coverage, as well as for the shortfall in Medicaid enrollees captured by the survey. In addition, we have imposed consistent definitions on certain types of insurance (such as a consistent minimum age to be a policy holder with employer-sponsored insurance). For those adjustments that represented a change in the survey, we have used the more current data in order to adjust the data from earlier survey years.
The adjustments were made to a uniform set of file extracts for the period March 1995 through March 2004. The initial files contained no adjustments; merely using the insurance definitions and weights provided by Census for each year but recoded into a more standard format. The following adjustments were then made to the files: a) updating the survey weights to reflect the new decennial Census, b) adjustments for employer sponsored insurance (age of policy holder, coverage from outside of household), c) adjustment for verification and SCHIP, and d) adjustment for Medicaid undercount. These adjustments are briefly described below, and are addressed in more detail in the appendix of this document (See “Technical Appendix: A Longitudinal Model of Health Insurance: An Update of Employer Sponsored Insurance, Medicaid, and the Uninsured”).
6 For example, the survey update allowed identification of spouses who had insurance in their own name from their own employer in addition to being listed as a dependent on another policy, a change that increased the counts of persons with employer-sponsored insurance policies.
Updating the Survey Weights
The March CPS includes a supplement weight which allows the records to sum to the total non-institutionalized population. Each person is assigned a weight based on person characteristics (such as race, etc) such that the records sum to the total population in accordance with the Bureau’s projections of Decennial Census population levels.
The first adjustment made to the time series was to allow for a consistent weight basis for the time series. When the March 2002 file was released, the weights were benchmarked to the 2000 Census. Previously, the years from 1990 forward had been benchmarked to the 1990 Census. Census then released sets of 2000 consistent weights for both March 2000 and March 2001. Moving to 2000 weights more accurately reflects the underlying population, but causes some discontinuity in the time series in the first year the new weights are used. To correct for this, we determined the total change in population due to the shift to 2000 consistent weights and then WORKING PAPER, 31 MARCH 2005 Page 15 of 34 spread the increase smoothly back across 10 years. Specifically, we calculated the percentage increase in the population for CY 2000 and 2001 by race and by age and then averaged the percentage increase across the two years for each cell. This increase was then spread across ten years (the full decade) with CY 2000 having the full increase and CY 1991 having a factor of 1.00 (unchanged). These factors were used to increase the person weights, record by record, on the CPS files from March 1995 through March 1999.
Employer Sponsored Insurance (ESI) Adjustments
Due to changes in the CPS over time, as well as Census assumptions in recoding the unadjusted data, there were significant discontinuities in the ESI estimates that needed to be adjusted for, in order to be able present a consistent time series. Our three main issues are: age of ESI policy holder, addressing coverage from outside the household, and addressing duplicate coverage at the person level.
Our first ESI adjustment was to enforce a consistent minimum age for ESI policy holders. Census coding prior to March 1995 did not permit ESI policy holders to be under age 15. The new questions that begin in March 1995 do not have this rule in place, and as a result the ages for some policy holders seem unreasonably low. For consistency, we have instituted a rule that states a person must be at least age 18 (unless married) to be considered an ESI policy holder, otherwise they are changed to be a dependent. This adjustment was done for all years, and while it does not affect the level of total ESI coverage, it does show a very small shift from policy holders to dependents.
The goal of our second ESI adjustment was to consistently define whether coverage from outside the household was employer sponsored or non-group in nature. After 1995, Census coding rules placed anyone with coverage from outside the household, who was age 15 or older, into private non-group status. We looked at family characteristics, such as the presence alimony, child support, or multiple persons with outside coverage, in order to determine when group coverage was likely and reassigned these cases as ESI. In doing so, the goal was to keep families together under one ESI policy when there were several persons in a family with outside coverage. The effect was to increase the number of persons with employer-sponsored group coverage by about a million persons each year (a less than one percent change).
Our final ESI adjustment, which was only applied to the pre-March 1995 surveys, enabled us to better identify non hierarchical private insurance coverage. The coding rules that Census employed prior to March 1995 did not allow identification of spouses who had coverage both in their own name and as a dependent. By looking at the raw data from March 1995 forward we were able to notice trends in duplicate coverage and impute them back onto the earlier years. While absolute (net) counts of covered persons did not change, the gross counts of those covered did change in order to take into affect the duplicate coverage issue.
Adjusting for Verification
The March 2000 CPS added a question to verify that individuals who indicate they lack coverage are indeed uninsured.7 The uninsured on the CPS had historically been a “residual” of those who answered they did not have other coverage types.
Research from other surveys suggested that asking individuals directly if they were uninsured would capture more people with coverage, hence the decision to add a question directly verifying no coverage. As it turned out, the verification question, overall, finds about 8% fewer uninsured each year.
Given the addition of the verification question has increased the number of persons reporting insurance coverage, we have adjusted the CPS in years prior to 2000 to mimic the effect of the verification question in those years. That is, each insurance category was adjusted, by age group, to approximately represent what would have been picked up had the verification question been asked in the earlier years. The uninsured have been reduced, within age group, proportional to the effects of verification found on the March 2000 through March 2004 CPS files. They are then given the coverage profile of those found to have coverage only through the verification questions.
7 From 2004 ASEC Questionnaire: “I have recorded that (name/you) (was/were) not covered by a health plan at any time during 2003. Is that correct?”
Adjusting for SCHIP
In 1998, the State Children’s Health Insurance Program (SCHIP) was implemented, and since then has become a growing source of coverage for children. In March 2001, the CPS added a question to measure coverage under SCHIP.8 As with the verification question, the methodology mimicked the effect of the new SCHIP question as if it has been asked in 1999 and 2000, which was to lower Medicaid counts slightly (under a half million), trivially affect the uninsured. It should be noted that the SCHIP adjustment referred to here is not an “undercount” adjustment. SCHIP coverage was not imputed to levels found in the program itself, but was imputed to levels consistent with the amount found on the March 2001 and 2002 CPS files in order to mimic the effect of having the question present in the survey from the start of the SCHIP program. That is, given that the March 2001 CPS found approximately 80% of the actual SCHIP enrollment from CY 2000,9 we impute approximately 80% of SCHIP for CY 1999 and 1998 onto the March 2000 and March 1999 files.
8 From 2004 ASEC Questionnaire: “In (state) the (fill state CHIP program name) program (also) helps families get health insurance for CHILDREN. (Just to be sure,) Were any of the children in this household covered by that program?” READ IF NECESSARY: “(fill in state CHIP program name) is the name of the (state’s) CHIP program. It is the same as Children’s Health Insurance Program, which helps pay for children’s health care.”
9 SCHIP counts on the March 2001 CPS were 69% of program counts (CMS) for FFY00, and 87% of the December 2000 point in time count according to the Kaiser Family Foundation. An average of these was used to compute the target for March 2000 and March 1999, based on FFY99, FFY98, and Dec 1999 and Dec 1998 numbers.