Under 65 Microsimulation

The Center for Health and Economy Under-65 microsimulation model is a powerful tool for analyzing the United States health insurance market for residents under 65 years of age. The model is capable of analyzing the effects of current law on the number of insured Americans, the price of health insurance, the efficiency and accessibility of health care, and the impact on the federal budget. Based on this analysis, H&E is able to project the outlook of American health care under current law as well as alternative scenarios.

The microsimulation model uses micro-data—data on individuals rather than in aggregate—available through the Medical Expenditure Panel Survey – Household Component (MEPS), a comprehensive source of health care cost and usage data of the non-institutionalized adult population in the United States collected by the Agency for Healthcare Research and Quality. While MEPS is a nationally representative survey, H&E imputes state-specific survey results through regional sampling calibrated to state-specific demographic information available in the American Community Survey and state estimates of uninsurance in the Current Population Survey, both of which are surveys collected by the Census Bureau. State-specific information is an important aspect of the model as health care regulation and pricing can vary widely between states.

Using this data in conjunction with available insurance plans and premium prices, H&E is able to estimate individual level preferences for various types of health insurance. National survey weights allow H&E to then aggregate these individual level estimates into a descriptive outlook of the national health insurance market. In the estimation step, the model accounts for health policies such as taxes, subsidies, guaranteed issue, age-rating requirements, etc. It is straightforward for the model to adjust these policies to account for health policy changes, and thus H&E is readily able to compare and analyze the impact of current and proposed legislation.