Private Insurance: General
About the Private Insurance Market
Most Americans receive their health coverage through the private insurance market, usually through their jobs. However, many people buy insurance on their own in the individual market. Since coverage from private companies is the largest source of insurance for Americans, it is likely to be a central part of federal and state health reform efforts.
The accessibility, affordability, and quality of private insurance must be improved if it is to adequately serve consumers. In order for private insurance to provide Americans with financial protection from health care costs while also covering the services that they need, stronger consumer protections must be adopted in all private insurance markets and included in all health reform efforts. The protections needed include those that do the following:
- prevent unaffordable premium hikes,
- guarantee that the benefits covered by plans are adequate,
- ensure that coverage is available and affordable for high-risk populations and those with pre-existing conditions, and
- require that consumers be made aware of their legal rights.
Policies designed to improve the quality of the care that insurance plans cover, such as those that aim to reduce medical errors or that encourage the use of evidence-based medicine, can also help consumers obtain the care they need, if they are enacted in a careful manner.
Below are selected resources about the workings of the private health insurance market.
From Families USA
Consumer Protections in the Private Health Insurance Market is a PowerPoint presentation that provides an overview of existing consumer protections and those that should be adopted in order to improve the private health insurance market for consumers. (November 2009)
Empty Promise: Searching for Health Insurance in an Unfair Market discusses how the individual health insurance market differs from the employer market and examines what happens to consumers who seek coverage in the individual market. Problems in the individual market include policies that don't provide quality coverage; policies that are very expensive or that cost more than advertised; and the fact that many applicants cannot obtain a policy at any price. (August 2008)
Failing Grades: State Consumer Protections in the Individual Health Insurance Market Laws that protect consumers who purchase health coverage in the individual market vary across the country. In many states, insurance companies can deny coverage, raise premiums significantly, refuse to cover treatment for certain conditions, and even revoke the coverage of policyholders who have been paying premiums for years. (June 2008)
From Other Organizations
Employer Health Benefits 2011 Annual Survey
looks at trends in job-based health coverage, including premiums,
employee contributions, and cost-sharing. The survey found that average
annual premiums for family health coverage are 9 percent higher than
they were in 2010. (The Kaiser Family Foundation, September 2011)
Employer Health Benefits 2009 Annual Survey is an annual survey of job-based insurance. (Kaiser Family Foundation and Health Research and Educational Trust, September 2009)
U.S. Current Population Survey provides information about the number of people who have private insurance, public insurance, and the number who are uninsured. (U.S. Census Bureau, August 2008)
The Fraying Link between Work and Health Insurance: Trends in Employer-Sponsored Insurance for Employees, 2000-2007 finds that job-based coverage has continued to decline, and the uninsured rate has increased among employees and among low-income children with family access to job-based coverage. Employer coverage is expected to continue to decline as increasing premiums and a worsening economy lead more employers to drop coverage. (Kaiser Commission on Medicaid and the Uninsured, December 2008)
Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 2008 Current Population Survey examines the factors that affect whether an individual has health insurance and the sources of that coverage. According to the report, the percentage of U.S. residents younger than age 65 who had health coverage through their employer remained at 62.2 percent between 2006 and 2007, but this year’s rise in unemployment and food and gasoline prices suggest a future decline in the number of workers who have or are able to afford employer-based health insurance. (Employee Benefits Research Institute, September 2008)
How Private Health Coverage Works: A Primer–2008 Update explains how private health coverage in the U.S. works. It discusses the fundamental aims of private health coverage and sorts out the complicated web of state and federal regulations that govern it. (Kaiser Family Foundation, April 2008)
Healthinsuranceinfo.net Consumer guides to getting and keeping health insurance, written by the Georgetown University Health Policy Institute, are available for each state and the District of Columbia. The guides are available online and are updated periodically as changes in federal and state policy warrant. (Georgetown Health Policy Institute, January 2008)
Private Health Insurance 101, a tutorial, provides an overview of the private health insurance system. It outlines basic concepts, including risk spreading, risk selection, and regulation. It also discusses eligibility, coverage, and costs for consumers. (KaiserEDU.org, August 2006)
Consumer-Directed Health Plans is a tutorial that explains the principles and different models of so-called consumer-directed health plans, including Health Savings Accounts (HSAs). The tutorial also discusses how such health plans are financed, as well as the impact they are likely to have on health care spending. (Kaiser Family Foundation, June 2006)
Fundamentals of Underwriting in the Nongroup Health Insurance Market: Access to Coverage and Options for Reform Although the majority of Americans with health insurance obtain coverage through their employers, many individuals must negotiate the nongroup insurance market alone. Insurers use a process called medical underwriting to identify applicants with current or recent medical problems. Because these applicants are likely to cost the insurer more in claims than a healthier person, insurers may charge them higher premiums or restrict or deny coverage. This report reviews the practice of underwriting, state and federal regulation of insurers that offer nongroup health coverage, and several proposed options for improving access to coverage for applicants who are in poor health. (National Health Policy Forum, April 2005)
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