Impact of discontinuity in health insurance on resource utilization

BACKGROUND: This study sought to describe the incidence of transitions into and out of Medicaid, characterize the populations that transition and determine if health insurance instability is associated with changes in healthcare utilization. METHODS: 2000-2004 Medical Expenditure Panel Survey (MEPS) was used to identify adults enrolled in Medicaid at any time during the survey period (n = 6,247). We estimate both static and dynamic panel data models to examine the effect of health insurance instability on health care resource utilization. RESULTS: We find that, after controlling for observed factors like employment and health status, and after specifying a dynamic model that attempts to capture time-dependent unobserved effects, individuals who have multiple transitions into and out of Medicaid have higher emergency room utilization, more office visits, more hospitalizations, and refill their prescriptions less often. CONCLUSIONS: Individuals with more than one transition in health insurance status over the study period were likely to have higher health care utilization than individuals with one or fewer transitions. If these effects are causal, in addition to individual benefits, there are potentially large benefits for Medicaid programs from reducing avoidable insurance instability. These results suggest the importance of including provisions to facilitate continuous enrollment in public programs as the United States pursues health reform.