We consider the impact of state regulation of the small-group and individual insurance markets, respectively, on two segments of the population:
- Adults aged 18-64 in families of workers who are employed in small private-sector firms (for group market reforms); and
- Adults aged 18-64 in families of workers who are employed in private-sector firms of any size, and who have neither employer-based coverage nor public coverage (for individual market reforms).
By selecting these two groups for analysis we hope to discern impacts that might be undetectable among the entire population and also to eliminate variation for which dummy variables (e.g., worker or nonworker family) may be inadequate controls. Moreover, by selecting only the adult population we hope to eliminate some problems that may result from under-reporting of public program coverage; eligibility for public coverage is much less common among adults than among children. The years of analysis are 1995 through 1997; all estimation is done at the person-level using general linear model regression.
Our estimates rely on three sources of data:
- The March 1996, 1997, and 1998 Current Population Surveys. Within CPS families we identified the “greatest earner” as the individual in the family who (a) reported nonzero earnings during the year; and (b) reported greater earnings than any other adult family member. All family members were then matched to their greatest earner. Earlier research (Chollet, 1994) determined that the employment characteristics of the greatest family earner predict employer-based coverage among family members more reliably than individuals’ own employment characteristics.
- Verified data describing state regulation. These data were compiled primarily from an Alpha Center survey of state Departments of Insurance, conducted in 1998 with funding from the National Association of Insurance Commissioners (NAIC). Responses were verified against a database of state small-group insurance regulation that had been compiled by Simon (1999a), those data were adopted where the Alpha Center survey was unable to obtain information or obtained information that was suspect. Similarly, where our survey information about individual market regulation were missing or suspect, we obtained information from the Georgetown University Health Policy Center survey of individual market regulation. All of our regulatory variables reflect verified, full-year implementation of statutes, not enactment.
- A health insurer database compiled by Alpha Center with funding from the Robert Wood Johnson Foundation. We compiled the health insurer database from insurers’ annual reports to the states (assembled by NAIC), and supplemented these data with a survey of every commercial insurer that reported selling health insurance coverage (of any type) in 1995, 1996 or 1997. These data identify (in the group and individual markets, separately) the type of insurer (HMO, commercial or BCBS), the insurer’s earned premiums associated with primary major medical coverage (by state), and the insurer’s medical losses on this business. (An extensive description of this database is provided in Chollet et al., 2000).