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Researchers Find High Individual Health Acceptance Rate

By Matt Brady

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America’s Health Insurance Plans says the free market is working well for the 16 million Americans who get their health coverage from the non-group health insurance market.[@@]

Researchers at AHIP, Washington, conducted their latest individual health market study using figures for the 12-month period ending in June 2004. AHIP researchers used data for the 12-month period ending in April 2002 when they completed the previous individual health market study.

Between April 2004 and June 2004, the average price for individual health coverage increased 9.6%, to $2,268, while the average price for family coverage increased about 10%, to $4,424, according to AHIP researchers.

But AHIP notes that non-group coverage is still much less expensive than employer-sponsored coverage, which costs an average of $3,696 for each individual employee covered and $9,948 for each family covered.

“The individual market is playing a vital and increasingly important role in our nation’s health care system,” says AHIP president Karen Ignagni

The AHIP researchers based their latest study on a survey of AHIP member companies active in the individual market.

In 2004, the typical individual health insurance policy was a preferred provider organization plan with an annual deductible of almost $2,000, a yearly out-of-pocket spending limit of about $4,000 and a lifetime maximum benefit of almost $5 million.

In states that let health insurers use individuals’ medical histories when underwriting health insurance applications, insurers offered almost 90% of the applicants coverage, the researchers report.

In the states that allow individual medical underwriters, carriers offered more than 75% of applicants coverage at standard rates. The carriers offered 22% of applicants a rate that was higher than the standard rate, but the carriers asked only 1% of the applicants to accept coverage exceptions for specified conditions, according to the AHIP researchers.

The percentage of applicants offered coverage falls to about 70% for applicants ages 60 to 64, down from about 80% for applicants ages 50 to 54, the researchers report.

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