WHO ENROLLED IN A STATE PROGRAM FOR THE UNINSURED - WAS THERE ADVERSESELECTION

Managed care plans may hesitate to participate in programs for uninsur ed persons because they fear adverse selection, whereby only the sicke st people or highest users would choose to join the program. We studie d this issue in Washington State's Basic Health Plan, a demonstration program that provides subsidized health insurance for families earning less than 200% of the poverty level. We interviewed people in three c ounties who enrolled in the program, and compared them to people in th e same counties who were eligible but did not enroll. There were subst antial differences between enrollees and eligibles in education, age, income, employment, race, and insurance status. In spite of these demo graphic and access differences, health status was remarkably similar f or enrollees and eligibles, with the few significant differences favor ing the enrollees. In addition, previous and subsequent use of health services was similar or lower for enrollees. The results for health st atus and utilization were similar across the three counties, even thou gh the counties and the providers were quite different. We conclude th at there is no evidence of adverse selection. This is welcome news for the health plans, but suggests that the BHP may not have reached thos e most in need of insurance.