Characteristics of Health Insurance Coverage

Information about the generosity of health insurance coverage is essential for formulating health financing policy. This Note describes the insurance coverage held by individuals under age 65, based on data collected as part of the RAND Health Insurance Experiment. The study found notable differences between income groups in the degree of protection against medical expenses. The poor are more likely to be uninsured than higher income individuals, and the difference is pronounced if adequacy of protection is defined relative to income. The study also found that a few key characteristics of a medical plan explain about 70 percent of the variance between plans in the comprehensive generosity measures, suggesting that a simple set of proxy indicators of plan generosity can be obtained at reasonable cost.