Transitions in health insurance coverage appear to be the norm for most Americans over time. Our analysis of point-in-time coverage data reveals striking age- and income-related patterns that imply change over time, both in the types of coverage people are most likely to have and in their probability of being uninsured. As the quality and availability of data needed to track individuals across coverage programs improve, a more complete picture of these lifetime dynamics is emerging.
Analysis of the data by age and income using the McKinsey Predictive Agent-based Coverage Tool (MPACT), as well as recent studies on lifetime income dynamics, suggest that short-term fluctuations and long-term coverage transitions over the course of an individual’s lifetime are common. Given Medicaid expansion and the introduction of income-related subsidies in the individual market, an individual may move between Medicaid coverage, a Qualified Health Plan, and uninsured status over the course of a couple years. Similarly, many middle-aged, commercially insured individuals may have been on Medicaid at one time, and most of them will be on Medicare in the future.
Individuals may experience short-term coverage transitions in the context of a longer-term path through different types of coverage. As a result, payers may want to view short-term fluctuations in coverage and long-term transitions of their members as interrelated phenomena, with implications for how they think about their business.