Coverage Interrupted: Income Volatility and Health Insurance Patterns Among Low-Income Adults

• In Event: A New Perspective on Minimum Wage Effects

Abstract

Background

While Medicaid is a key source of health insurance for low-income families who cannot afford private coverage, individuals with fluctuating earnings may experience unstable coverage, which can limit their access to care. Because Medicaid eligibility is generally based on monthly income, even those who remain in need over time may cycle in and out of coverage due to short-term income changes. Although income volatility is common among low-income households, its impact on health insurance coverage patterns remains understudied. This study addresses this gap by examining (1) healthcare coverage patterns among low-income non-elderly adults and (2) the relationship between income instability and those patterns.

Methods

Data were drawn from the 2014 panel of the Survey of Income and Program Participation, which includes monthly income and health insurance coverage from 2013 to 2016. The analytic sample consisted of non-elderly adults (ages 18–64 at baseline) who ever had household income at or below 200% of the federal poverty level during the study period (N = 2,463). Sequence analysis identified patterns of monthly health insurance coverage across seven statuses: Medicaid, Medicare, Dual Eligible, Private, Marketplace, Uninsured, and Other. These patterns served as the dependent variable in a multinomial logistic regression assessing the association between income instability—measured as the coefficient of variation of monthly income aggregated across the four-year period—and coverage trajectories. Models controlled for demographic and socioeconomic characteristics.

Results

Sequence analysis revealed seven distinct coverage patterns over the 48-month period. The largest group, Chronically Uninsured (23.0%), averaged 39 months without coverage and only 3 months with Medicaid. Medicaid with Gaps (21.8%) had 31 months of Medicaid coverage and 9 months uninsured. Transited to Marketplace (14.4%) primarily shifted from gaps or Medicaid to Marketplace plans following the ACA’s implementation in 2014. Continuous Medicaid (11.1%) maintained uninterrupted coverage throughout. The remaining groups included Private Coverage (11.2%), Dual Eligible (11.1%), and Mostly Medicare (7.7%).

Income volatility varied across groups. Medicaid with Gaps exhibited the highest income instability (CV = 0.61), followed by Chronically Uninsured (CV = 0.57) and Transited to Marketplace (CV = 0.56). Continuous Medicaid had somewhat lower volatility (CV = 0.52), while Private Coverage (CV = 0.48), Mostly Medicare (CV = 0.44), and Dual Eligible (CV = 0.38) had more stable incomes.

Regression results indicated that greater income instability significantly increased the likelihood of being in the Medicaid with Gaps group compared to Continuous Medicaid, Dual Eligible, Mostly Medicare, or Private Coverage groups. However, income instability did not significantly differentiate Medicaid with Gaps from Chronically Uninsured or Transited to Marketplace groups.

Discussion

Nearly half of low-income adults experienced either chronic uninsurance or discontinuous Medicaid coverage over the four-year period. Findings suggest that income instability may be a structural factor contributing to coverage disruptions. Those with greater volatility were more likely to experience gaps in Medicaid coverage, averaging nine months without insurance—interruptions that may hinder access to care. These results highlight the need for policies that address not only eligibility thresholds but also the income dynamics affecting insurance continuity.

Authors

• Jeehae Kang, University of Illinois
  Presenting Author

• Soohyun Yoon, University of Illinois
  Non-Presenting Co-Author

• Chi-Fang Wu, University of Illinois
  Non-Presenting Co-Author