Long-term determinants of patterns of health insurance coverage in the Medicare population

Using data from the 1990 Health Supplement to the Panel Study of Income Dynamics, we examine the determinants of patterns of insurance coverage among the elderly. Among those with supplemental insurance through an employment-based source, the primary determinant of having insurance is work history, specifically job tenure and occupation of household heads and their spouses. Among those who do not have employer-provided insurance, wealth is the most important economic factor in the purchase of private insurance. Blacks, persons with less education and women household heads are less likely to purchase supplemental insurance. We find little evidence that persons in prior poor health are more likely to purchase supplemental insurance, and the most important determinant of dental or drug coverage is having employer-based insurance. The current trend toward decreased generosity of post-retirement benefits implies that fewer older Americans will have insurance for these services.