People who buy their own insurance report that their insurers most recently requested premium increases averaging 20 percent, according to a new Kaiser Family Foundation survey examining the experiences and views of people who buy health coverage in the individual market.
Overall, roughly three in four people (77 percent) with non-group coverage report facing a premium increase with a current or previous insurer. Most said they paid the increase, but 16 percent of all policyholders say they switched plans, either buying a less expensive policy from their current insurer or switching companies altogether.
After taking these so-called “buy downs” into account, those who faced a premium increase ended up paying 13 percent more than before.
Many of those facing a premium increase who, as a result, switched to a cheaper policy said they now have less comprehensive coverage than before. The survey found that those who switched are more than four times as likely to say their new plan offers worse benefits than their previous plan (49 percent) as they are to say their new plan’s benefits are better (11 percent).
While most people in the United States obtain health insurance through their employer, about 14 million people younger than 65 have coverage through the non-group or individual market, which has faced scrutiny recently in news reports about insurers’ steep rate increases and in the market reforms in the new health reform law, much of which is set to begin taking effect in 2014. Kaiser’s “Survey of People Who Purchase Their Own Insurance” provides insight into the current state of the non-group market. It is based on a nationally representative random sample of 1,038 people ages 18-64 who purchase their own health coverage, and was conducted between March 19 and April 2, during the final congressional debate and enactment of health reform legislation.
Premiums and deductibles
More than half (57 percent) of those with non-group insurance said they are the only ones covered by their policy. This group reported average annual premiums of $3,606, less than the average $4,824 premium reported in 2009 for employer-sponsored coverage (which typically provides more comprehensive insurance).
Among those whose policies cover not only themselves but also other family members, the average annual premiums are $7,102. Since insurers tend to vary premiums by age in the non-group market, older people reported paying higher premiums than younger people, both for individual and family policies.
Many people reported having plans with high deductibles, including 26 percent with an annual deductible of $5,000 or more and 6 percent with a deductible of $10,000 or more.
Overall, the average deductible reported for single coverage is $2,498 – almost four times the $634 deductible reported on average for employer-sponsored PPO coverage. Those with family coverage where deductibles must be met on a per-person basis reported an average deductible of $2,959, while those with a family deductible (the total spending required across the entire family before coverage kicks in) reported an average of $5,149.
Cost concerns among policyholders
Those who purchase their own coverage are much more likely to worry about being their ability to pay for health care than those with employer coverage.