Individual market tough for many insurance buyers

Study shows high rates, limits on coverage are common, and it raises concerns about health insurance tax-credit proposals.

By Geri Aston, AMNews staff. July 9/16, 2001.

Washington -- The individual health insurance market can be an unpredictable, costly place to buy coverage, even for people who have common ailments, according to a recent study released by the Henry J. Kaiser Family Foundation.

Those findings have implications for lawmakers who are interested in creating tax credits to help the 42.6 million uninsured Americans purchase coverage. The individual market is where those people would shop for insurance.

"The individual market can be a tough place to buy insurance, especially for those with less than perfect health," said Diane Rowland, ScD, the foundation's executive vice president. Given the difficulties, lawmakers and policymakers should ask: "Is this the best building block to expand insurance to uninsured Americans?" she said.

The study, conducted by Georgetown University's Institute for Health Care Research and Policy, used seven hypothetical applicants to test access to the individual market. Researchers asked 19 real insurers in eight regions to treat the fictitious people as customers searching for a policy with a $500 annual deductible and a $20 co-pay for physician office visits.

The characters had conditions ranging from hay fever to AIDS and represented a broad cross section of society -- from a typical family of four to a retired salesman.

The results showed that even the most healthy hypothetical applicant was rejected by some insurers, and all were frequently offered plans with riders barring coverage for their preexisting health conditions, higher premiums than a completely healthy individual would face, or larger cost-sharing responsibilities than they requested. [...]