Who Enrolled in a State Program for the Uninsured: Was There Adverse Selection?

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Abstract

Managed care plans may hesitate to participate in programs for uninsured persons because they fear adverse selection, whereby only the sickest people or highest users would choose to join the program. We studied this issue in Washington State's Basic Health Flan, a demonstration program that provides subsidized health insurance for families earning less than 200% of the poverty level. We interviewed people in three counties who enrolled in the program, and compared them to people in the same counties who were eligible but did not enroll. There were substantial differences between enrollees and eligibles in education, age, income, employment, race, and insurance status. In spite of these demographic and access differences, health status was remarkably similar for enrollees and eligibles, with the few significant differences favoring the enrollees. In addition, previous and subsequent use of health services was similar or lower for enrollees. The results for health status and utilization were similar across the three counties, even though the counties and the providers were quite different. We conclude that there is no evidence of adverse selection. This is welcome news for the health plans, but suggests that the BHP may not have reached those most in need of insurance.

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