NCPA - National Center for Policy Analysis

State Health Insurance Reforms Increased Uninsured Ranks In 1997

December 17, 1998

Key state legislative and regulatory reforms intended to increase the number of Americans with health insurance coverage have instead increased costs, and thus increased the number of people without insurance, says a new study published by the Health Insurance Association of America (HIAA).

The study by William S. Custer of the Center for Risk Management and Insurance Research at Georgia State University used data from the March 1998 supplement to the Census Bureau's Current Population Survey (CPS).

Among Custer's findings:

  • Mandates that insurance plans cover mental health increased the probability of being uninsured by almost 6 percent
  • Community rating and guaranteed-issue requirements in the individual health insurance market increased the probability an individual will lack health insurance coverage by 11.3 percent.
  • The use of small-group rating bands coupled with guaranteed issue increased the probability an individual will lack health insurance by 15.8 percent.
  • Small-group community rating, in conjunction with a guaranteed issue requirement, increased probability an individual will lack health insurance by 28.5 percent.

State high risk pools, on the other hand, were associated with increased health insurance coverage, decreasing the probability of an individual being uninsured by 1.5 percent.

Custer estimates that the trend toward more Americans lacking health insurance will continue. By 2007, more than one out of every five non-elderly Americans, or 53 million people, will be without health insurance

However, if economic conditions worsen and health costs are higher than anticipated, the number of uninsured Americans could grow as high as 60 million by 2007 -- nearly one out of every four non-elderly Americans.

Source: William S. Custer, "Health Insurance Coverage and the Uninsured," December 10, 1998, Health Insurance Association of America, 555 13th Street, N.W., Washington, D.C. 20004, (202) 824-1600.


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