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Tuesday, June 29, 2010

Americans in the individual market to get help

Kate Blocher

Staff Writer

During the final months leading up to the passage of health reform, it seemed you couldn’t read a newspaper without seeing a headline about another insurance company attempting to impose enormous rate hikes on its customers in the individual market. Although these insurance companies tried to make it seem like the rate hikes would only affect a small portion of the market, a new survey out by the Kaiser Family Foundation shows that not only was a large percentage of the individual market erroneously affected by the rate hikes, it forced some to switch to lower-cost plans with less coverage.

While most Americans get their insurance through employer coverage, 14 million purchase insurance through the individual or non-group market. The Kaiser Family Foundation conducted a survey and found that 77 percent of people who buy their own insurance reported facing a premium increase of 20 percent on average. That’s three out of every four people in the individual market affected. As a result of these increases, most people paid the higher premium, but 16 percent opted to switch to less expensive policy, which ultimately means less coverage for them.

The survey also found that many who are insured in the private market worry that they will not be able to pay for their health care. Not only are their premiums on average more expensive than those with employer coverage, but their plans tend to cover less, so they end up having to pay a larger share of their medical bills. Several who were surveyed had already experienced the negative effects of lack of coverage:

More than one in five (22 percent) say over the past year they or a family member covered by their plan did not get needed medical care because of the cost, and a similar share (20 percent) say they skipped filling a prescription due to cost.

Those with pre-existing conditions were also found to have negative experiences with the individual market as well, even if the managed to find coverage. Of those surveyed who were able to find insurance, “nearly half (49 percent) say they have had at least one problem getting their insurer to pay bills and one in five (21 percent) of those in the pre-existing group report that an insurance company denied them coverage in the past, compared to just 3 percent of other policyholders.” They also worry about the stability of their coverage.

It is clear from these statistics that the individual market is not working for consumers. Many of them feel insecure about their coverage, despite paying higher and higher premiums. Luckily health reform has laid the groundwork to begin to fix those problems by creating an exchange where consumers can easily shop for individual plans that meet a certain level of coverage. They will not have to worry about being denied due to a pre-existing condition, and if they cannot afford to pay the premiums, subsidies are available to help cover the cost of the insurance.

The current individual market is leaving millions of Americans with sparse coverage and insecure futures. Health reform will change all that by finally creating a private insurance market that works for the American people, not for the insurance companies.