The Individual Insurance Market Before Reform: Low Premiums and Low Benefits

National Opinion Research Center, Dayton, MN, USA.
Medical Care Research and Review (Impact Factor: 2.62). 03/2011; 68(5):594-606. DOI: 10.1177/1077558711399767
Source: PubMed


Based on analyses of individual market health plans sold through ehealthinsurance and enrollment information collected from individual market carriers, this article profiles the individual health insurance market in 2007, before health reform. The article examines premiums, plan enrollment, cost sharing, and covered benefits and compares individual and group markets. Premiums for the young are lower than in the group market but higher for older people. Cost sharing is substantial in the individual insurance market. Seventy-eight percent of people were enrolled in plans with deductibles for single coverage, which averaged $2,117. Annual out-of-pocket maximums averaged $5,271. Many plans do not cover important benefits. Twelve percent of individually insured persons had no coverage for office visits and only 43% have maternity benefits in their basic coverage. With the advent of health exchanges and new market rules in 2014, covered benefits may become richer, cost sharing will decline, but premiums for the young will rise.

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    ABSTRACT: The Affordable Care Act creates state-based health exchanges that will begin acting as a market place for health insurance plans and consumers in 2014. This paper compares the financial protection offered by today's group and individual plans with the standards that will apply to insurance sold in state-based exchanges. Some states may apply these standards to all health insurance sold within the state. More than half of Americans who had individual insurance in 2010 were enrolled in plans that would not qualify as providing essential coverage under the rules of the exchanges in 2014. These people were enrolled in plans with an actuarial value below 60 percent, which means that the plans covered less than that proportion of the enrollees' health expenses. Many of today's individual health plans are below the "bronze" level, the lowest level of plan that can be sold through exchanges. In contrast, most group plans in 2010 had an actuarial benefit of 80-89 percent and would qualify as highly rated "gold" plans in the exchanges. To sell to ten million new buyers on the exchanges, insurers will need to redesign benefit packages. Combined with a ban on medical underwriting, the individual insurance market in a post-health reform world will sharply contrast with the market of past decades.
    Health Affairs 05/2012; 31(6):1339-48. DOI:10.1377/hlthaff.2011.1082 · 4.97 Impact Factor
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    ABSTRACT: Objective To develop and validate a theoretically based and empirically driven objective measure of financial burden for U.S. families with children.Data SourcesThe measure was developed using 149,021 families with children from the National Health Interview Survey, and it was validated using 18,488 families with children from the Medical Expenditure Panel Survey.Study DesignWe estimated the marginal probability of unmet health care need due to cost using a bivariate tensor product spline for family income and out-of-pocket health care costs (OOPC; e.g., deductibles, copayments), while adjusting for confounders. Recursive partitioning was performed on these probabilities, as a function of income and OOPC, to establish thresholds demarcating levels of predicted risk.Principal FindingsWe successfully generated a novel measure of financial burden with four categories that were associated with unmet need (vs. low burden: midlow OR: 1.93, 95 percent CI: 1.78–2.09; midhigh OR: 2.78, 95 percent CI: 2.49–3.10; high OR: 4.38, 95 percent CI: 3.99–4.80). The novel burden measure demonstrated significantly better model fit and less underestimation of financial burden compared to an existing measure (OOPC/income ≥10 percent).Conclusion The newly developed measure of financial burden establishes thresholds based on different combinations of family income and OOPC that can be applied in future studies of health care utilization and expenditures and in policy development and evaluation.
    Health Services Research 10/2014; 49(6). DOI:10.1111/1475-6773.12248 · 2.78 Impact Factor

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