Why Individual Health Insurance Is Becoming Popular Individual health insurance (also called "non-group" health insurance) is generally purchased by those, who are not eligible for employer-sponsored plans. The individual health insurance market acts as a vital source of protection to millions of Americans, who do not have access to employer-sponsored health coverage. While it acts as a protective shield to individuals, this also suffers from the two most common criticisms. First, it is prohibitively expensive. Secondly, it is only available to the healthiest Americans. Undoubtedly, these issues are important. While many still rely on anecdotes and hypothetical examples, data are now becoming available, which demonstrate the affordability of individual coverage and the reasons, why individual health insurance is becoming popular. A recent survey of three insurance companies (eHealthInsurance, HIAA and Center for Studying Health System Change) actively marketing individual medical policies shows that a large majority of people, who lack employer-sponsored health insurance, can easily obtain affordable coverage from an individual policy. The study by the Health Insurance Association of America (HIAA) found that, even in states that allow insurers to consider the applicants’ health, nearly nine out of every 10 properly completed applications for individual health insurance result in an offer of coverage. Seventy one percent of completed applications for an individual policy resulted in an offer of full coverage at standard rates, while an additional 22 percent received offers of insurance with limits on the coverage, or at higher than standard premiums, or both. Because of health reasons, fewer than 12 percent of all completed applications submitted to the companies surveyed were declined. According to HIAA president Donald Young, M.D, this survey provides solid evidence that the individual market works well for the vast majority of those who don’t have access to health insurance through their job and it also reinforces the importance of buying health insurance before illness or other medical misfortune strikes. Recent Surveys of the Cost of Individual Health Insurance Survey Date Average Annual Premium Single Family eHealthInsurance January 2002 $1,907 NA HIAA July 2002 $2,070 $4,009 Center for Studying Health System Change July 2002 $2,568* NA eHealthInsurance September 2002 $1,871 NA * Estimated According to this survey the consumers are actually paying for individually purchased health insurance. In January of this year, eHealthInsurance gathered data on 20,000 policies sold through its website. The average annual premium for single coverage was just over $1,900. In May, the Health Insurance Association of America (HIAA) surveyed member companies active in this market for the average premiums for policies in force as of the beginning of April 2002. The responses represented almost 700,000 persons with single policies and over 1.3 million persons with family coverage. The average annual premium for single coverage was $2,070, and the average annual premium for family coverage was just over $4,000. In July, the Center for Studying Health System Change released the results of a study that estimated an average annual premium of $2,568 for single coverage. However, this estimate was based on a sample of only 2,500 individual insurance policies, and was adjusted to represent a hypothetical population of individuals eligible for a tax credit, rather than current purchasers. HIAA Premium Survey Results       Insured Age   Single Insured Count   Family Count Average Annual Premium Single Family 0-19 46,438 11,435 $988 $1,713 20-24 68,308 4,890 1,038 2,283 25-29 82,138 17,710 1,160 2,628 30-34 69,107 41,545 1,410 3,081 35-39 66,243 65,479 1,671 3,360 40-44 66,970 80,903 1,983 3,781 45-49 69,656 78,699 2,285 4,097 50-54 72,913 60,027 2,749 4,696 55-59 72,602 39,525 3,277 5,530 60-64 77,240 22,739 3,642 6,227 Total 691,615 422,952 2,070 4,009 The study says that with the lack of an employer contribution and, for many, the inability to deduct premiums for income tax purposes, consumers in the individual market may chose to buy somewhat less coverage than the typical employee benefit plan. Even so, the survey shows that individual health insurance is readily available and affordable. The study may overstate the number of people denied coverage for health reasons because people in poor health may apply with multiple insurers. Young said insurance companies belonging to HIAA support state-based high-risk pools for those individuals denied coverage because of health conditions. This approach guarantees access to health insurance, and limits the premiums paid, even for people with serious health problems, without harming the consumers relying on the broader market.. He indicated 29 states have already created such a high-risk pool. The survey on availability of coverage examined data for more than 500,000 applications, and the premium survey included nearly 700,000 persons with single coverage and over 1.3 million with family coverage. So, it clearly demonstrates why individual health insurance is getting popular day by day. References: eHealthInsurance, The Costs and Benefits of Individual Health Insurance Plans, http://ehealthinsurance.com/ehealthinsurance/expertcenter/ExpertCenter.html (Sunnyvale, California: eHealthInsurance, January 2002). J. Hadley and J. Reschovsky, Tax Credits and the Affordability of Individual Health Insurance (Washington, D.C.: Center for Studying Health System Change, July 2002). T. Musco, Individual Medical Expense Insurance Affordable, Serves Old and Young (Washington, D.C: Health Insurance Association of America, July 2002). eHealthInsurance, The Costs and Benefits of Individual Health Insurance Plans, http://ehealthinsurance.com/ehealthinsurance/expertcenter/ExpertCenter.html (Sunnyvale, California: eHealthInsurance, September 2002). Employer Health Benefits: 2002 (Menlo Park, California: The Henry J. Kaiser Family Foundation and Health Research and Educational Trust, September 2002). K. Pollitz et al, How Accessible is Individual Health Insurance for Consumers in Less-than-Perfect Health? (Menlo Park, California: The Henry J. Kaiser Family Foundation, June 2001). Cost and Availability of Health Insurance for People with Chronic Health Conditions (Washington, D.C.: National Association of Health Underwriters, March 2002). K. Pollitz and L. Levitt, Explaining the Findings of a Study About Medical Underwriting in the Individual Health Insurance Market (Menlo Park, California: The Henry J. Kaiser Family Foundation May 2002). L. Tooman, Real People, and Real Coverage (Alexandria, Virginia: The Council for Affordable Health Insurance May 2002). © 2004 by Roger Lacocoa,  Affordable Health Insurance Quotes. ~~~~~~~~~ About the author: Roger Lacocoa is a professional consultant with Affordable Health Insurance Quotes, specializing in the areas of health, life and disability insurance. Disclaimer: All content in this website is provided for educational purposes only. The publishers of this website do not give any warranty as to the accuracy or completeness of the content on same website. No part of this website or any material appearing on the site may be reproduced, stored in or transmitted on any other website without written permission. All content is original and copyrighted.