Does Awareness of the Affordable Care Act Reduce Adverse Selection? A Study of the Long-term Uninsured in South Carolina

Adverse selection predicts that individuals with lower health status would be more likely to sign up for health insurance. This hypothesis was tested among the long-term uninsured population in South Carolina (SC). This study used data from an in-person survey conducted from May 2014 to January 2015. Interviews were held with the long-term uninsured individuals at multiple sites throughout the state, using a multistage sampling method. SC residents aged 18 to 64 years who had had no health insurance for at least 24 consecutive months were eligible for the survey. The dependent variable is the participants’ attempt to obtain insurance coverage. Key independent variables are self-reported health status, hospitalization in the past year, use of emergency department in the past year, and presence of serious long-standing health problems. The analysis is stratified by the awareness of the Affordable Care Act (ACA)’s individual mandate while controlling for age, gender, race/ethnicity, and household income. Participants’ self-reported health status was not significantly associated with the attempt to sign up for health insurance in both groups (those aware and those unaware of the individual mandate). Being hospitalized in the previous year was significantly associated with their attempt to sign up for insurance in both groups. Participants with serious long-term health problems were more likely to have attempted to sign up for insurance among those who were not aware of the ACA. However, this association was statistically insignificant among those who had heard of ACA. Sicker people were more likely to attempt to sign up for insurance. However, being aware of the ACA’s individual mandate seemed to play a role in reducing adverse selection.