Heath Insurance Articles
Individual Health Insurance Widely Available, Affordable
Oct 22, 2002
New Study Affirms Individual Medical Policy Market Works for Most
Consumers, HIAA President Says
Washington, DC – A recent survey of insurance companies actively
marketing individual medical policies shows that a large majority
of people who lack employer-sponsored health insurance can easily
obtain affordable coverage from an individual policy.
The study by the Health Insurance Association of America found
that, even in states that allow insurers to consider the applicants’
health, nearly nine out of every 10 properly completed applications
for individual health insurance result in an offer of coverage.
Seventy one percent of completed applications for an individual
policy resulted in an offer of full coverage at standard rates,
while an additional 22 percent received offers of insurance with
limits on the coverage, or at higher than standard premiums, or
both.
Fewer than 12 percent of all completed applications submitted to
the companies surveyed were declined because of health reasons.
“This survey provides solid evidence that the individual market
works well for the vast majority of those who don’t have access
to health insurance through their job,” said HIAA president
Donald Young, M.D., “and it also reinforces the importance
of buying health insurance before illness or other medical misfortune
strikes.”
The study recaps information showing that insurance companies have
kept premiums for an individual health insurance policy affordable.
An HIAA survey released in July found that the average premium for
coverage of a single individual is about $172 per month, while the
average monthly premium for a family is about $334.
“Our data clearly demonstrates that individual health insurance
is within the financial reach of many American families,” Young
said, noting that passage of President Bush’s proposal for
income tax credits would make insurance even more affordable for
those with moderate incomes.
The study says that, with the lack of an employer contribution
and, for many, the inability to deduct premiums for income tax purposes,
consumers in the individual market may chose to buy somewhat less
coverage than the typical employee benefit plan. Even so, the survey
shows that individual health insurance is readily available and
affordable.
The study may overstate the number of people denied coverage for
health reasons because people in poor health may apply with multiple
insurers.
Young said insurance companies belonging to HIAA support state-based
high-risk pools for those individuals denied coverage because of
health conditions. This approach guarantees access to health insurance,
and limits the premiums paid, even for people with serious health
problems, without harming the consumers relying on the broader market,
he said. He indicated 29 states have already created such a high-risk
pool.
The survey on availability of coverage examined data for more than
500,000 applications, and the premium survey included nearly 700,000
persons with single coverage and over 1.3 million with family coverage.
The study is available at http://membership.hiaa.org/pdfs/policy/021021IndividualAccessStudy.pdf
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