Changes in coverage stability and churning for private, individual insurance under the Affordable Care Act.

Abstract

The Affordable Care Act (ACA) transformed the market for individual insurance. Using the 2-year panels of the Household Component of the Medical Expenditure Panel Survey covering the 2002-2022 period and controlling for the business cycle and other factors, we find the share of nonelderly adults enrolled in individual insurance doubled under the ACA. The percentage of adults covered by individual insurance 1-23 months more than doubled, and the percentage with at least 24 months rose 80% in states that did not expand Medicaid. Nearly all the gain came from adults who were uninsured immediately prior to enrolling. The prevalence of short individual market spells (<5 months) remained low after ACA implementation, and the ACA primarily helped cover individuals for longer spells. Individual insurance has always played a meaningful role in providing coverage for individuals ineligible for public programs and by bridging gaps between other forms of insurance. Because individual insurance is often temporary, more people may rely on individual insurance in their lifetimes than rely on it at a point in time. We document increases in individual coverage that suggest a strengthened role for this market after ACA implementation.