Impact of Employment Transitions on Health Insurance Coverage of Rural Residents

Research center:
Project funded:
September 2006
Project completed:
March 2011
Numerous studies have found that rural residents are more likely to be uninsured than urban residents. This coverage difference is generally due to more limited access for rural workers to employer-sponsored health insurance. Lower wages, and the tendency for rural residents to work for small employers, account for this reduced access.

While we have substantial information on static insurance coverage rates for rural residents, our knowledge about how coverage changes with employment transitions is limited. Previous research suggests that rural workers "particularly rural non-adjacent workers" may be at greater risk of becoming uninsured and staying uninsured longer. Over the past 20 years, federal policy attention for health insurance coverage has focused on ensuring continuity of coverage for individuals that experience an employment transition. For example, the 1985 Consolidated Omnibus Budget Reconciliation Act was passed to ensure that those with employer-sponsored coverage could retain that coverage even if that employment ceased. Similarly, the 1996 Health Insurance Portability and Accountability Act guaranteed individual coverage for those who leave a group plan.

However, both of these key policy interventions are inapplicable to the smaller employers that comprise the backbone of rural economies. Thus, rural workers may be more likely than urban workers to experience disruptions in health insurance coverage following an employment transition We will examine the following questions:

1. For each type of employment transition, what is the likelihood that an employed worker with private insurance will become uninsured? How does the likelihood of becoming uninsured compare for rural and urban workers?
2. Among workers that maintain coverage after each type of employment transition, how long does this coverage last? Are there rural-urban differences? What demographic or job characteristics predict the likelihood of maintaining stable coverage?
3. Among those that lose coverage, how long does the uninsured spell last? Are there rural-urban differences in these spell lengths? What demographic or job characteristics predict the likelihood of losing coverage?

The data analyses will be based on the 2005 and 2004 Medical Expenditure Panel Survey (MEPS).