Individual Market Health Insurance

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The individual insurance market provides coverage to more than 19 million people who purchase health insurance on their own. Because individual health insurance is not subsidized by employers or through the tax code, each consumer must pay the entire cost of the premium. The nature of the individual market differs greatly from the group markets because of many variables that make it a challenge to predict costs. In fact, many people who do not have employer-sponsored coverage only purchase individual market coverage when they anticipate needing medical services. Currently, applicants in the individual market are incentivized to purchase coverage before they need it, and to maintain coverage over time. This helps keep coverage as affordable as possible for all policyholders.   

The Impact of the Affordable Care Act 

The Affordable Care Act includes significant changes to the individual insurance market. Under health reform, all Americans will be able to purchase health insurance with no exclusions for pre-existing medical conditions in open enrollment periods even after they are ill or injured. In addition, premiums will no longer be based on someone’s health status - much like how the employer-sponsored insurance market works now. 

Impact on Premiums 

The ACA's coverage expansion, new benefits and market reforms will impact individual market health insurance premiums in 2014. Some provisions will increase premiums while others will make health care coverage more affordable for consumers.

A report by Milliman found that covering pre-existing conditions, requiring a broader benefit package, and covering uninsured Americans who have gone without medical care will benefit millions of people while increasing the cost of health care coverage.  The new health insurance tax and other fees will also increase premiums.

However, other provisions of the law will make health care coverage more affordable, including premium and cost-sharing subsidies and the transitional reinsurance program, which provides funds to help offset the impact of high-cost enrollees.

The impact on specific individuals will vary significantly depending on their age, gender, location, health status, income level, and what coverage they have today.  The report found that “young, healthy males could see substantial increases due to the combination of the overall rate change and the age/gender rating requirements” while “older, less healthy individuals could see rate reductions.” 

Health Insurance is Changing How Does the ACA Impact Premiums? It Depends. 
Health Insurance is Changing It Depends 

Latest Resources

What You Need to Know: The Link Between Market Reforms and the Individual Mandate - [PDF]

 

Fact Sheets/Issue Briefs/Talking Points | Strategic Communications | 09/16/2013

Summary of Benefits and Coverage and Uniform Glossary Proposed Rule: Implementation and Annual Ongoing Costs of Compliance - [PDF]

In September 2011, AHIP conducted a survey of health insurance plans on costs of compliance with the new Summary of Benefits and Coverage (SBC) and the Uniform Glossary requirements detailed in a notice of proposed rulemaking (NPRM) issued by the Department of Health and Human Services (HHS), Department of Labor, and Department of Treasury on August 22, 2011.

Reports/Research/White Papers | Center for Policy and Research | 08/20/2013

Comprehensive Assessment of ACA Factors That Will Affect Individual Market Premiums in 2014

A new report from Milliman, Inc. helps explain how the Affordable Care Act’s (ACA) coverage expansion, new benefits, and market reforms will impact individual market health insurance premiums in 2014. The report highlights how some provisions will increase premiums while others will make health care coverage more affordable for consumers. The focus of this report is to highlight the broad range of changes happening in the marketplace and the wide variation in impact that is likely to occur.

Reports/Research/White Papers | Strategic Communications | 04/25/2013

Impact of ACA Market Reforms on Affordability - [PDF]

James O'Connor of Milliman, Inc., presented at AHIP's 2013 Policy Forum on the impact of the Affordable Care Act's market reforms on affordability.

Reports/Research/White Papers | 04/22/2013

2011 Health Insurance: Overview and Economic Impact in the States

This report is a compendium of reference information on health insurance in the states.

Reports/Research/White Papers | Center for Policy and Research | 09/28/2011

The Federal Medical Loss Ratio (MLR) Calculations -- Background and Initial Costs of Compliance - [PDF]

In January 2011, AHIP conducted a survey of health insurance plans on costs of compliance with the new national Medical Loss Ratio (MLR) rule, as enacted in the Affordable Care Act (ACA) and described in an “interim final” rule issued by the Department of Health and Human Services (HHS) on December 1, 2010.

Reports/Research/White Papers | Product Policy, Center for Policy and Research | 06/06/2011

Fact Check on Individual Health Insurance Coverage

This fact check from the AHIP Coverage blog compiles research on the critical role of the individual insurance market, which serves more than 14 million people. The blog post also highlights what thought leaders, think tanks and the media are saying about the importance of a personal coverage requirement.

AHIP Coverage Blog Posts | 10/12/2010

AHIP Statement on the Status of Health Care Reform

Washington, D.C.

Press Releases | Strategic Communications | 02/22/2010

Individual Health Insurance 2009: A Comprehensive Survey of Premiums, Availability, and Benefits - [PDF]

The latest in a series of AHIP surveys shows that the market for individually purchased coverage is more affordable and accessible than may be widely known.

Reports/Research/White Papers | Center for Policy and Research | 10/21/2009

Health Plans Propose Guaranteed Coverage for Pre-Existing Conditions and Individual Coverage Mandate

Health plans today proposed guaranteed coverage for people with pre-existing medical conditions in conjunction with an enforceable individual coverage mandate.

Press Releases | Strategic Communications | 11/19/2008

AHIP Releases Guaranteed Access Proposal for the Individual Market - [PDF]

 

Reports/Research/White Papers | Center for Policy and Research | 12/19/2007

Individual Health Insurance 2006-2007: A Comprehensive Survey of Premiums, Availability, and Benefits - [PDF]

The latest in a series of AHIP surveys shows that the market for individually purchased coverage is more affordable and accessible than may be widely known.

Reports/Research/White Papers | Center for Policy and Research | 12/19/2007

Health Insurance: Overview and Economic Impact in the States, 2006 - [PDF]

A compendium of reference information on health insurance in the states.

Reports/Research/White Papers | Center for Policy and Research | 12/19/2006

Summary of the Health Care CHOICE Act of 2005 H.R. 2355 - [PDF]

View a section-by-section-analysis of the legislation.

Reports/Research/White Papers | Center for Policy and Research | 07/15/2005

Health Savings Accounts Off To a Fast Start in the Individual Market - [PDF]

Preliminary data from AHIP members show 438,000 people covered by September 2004.
View slides for this report. 

Reports/Research/White Papers | Center for Policy and Research | 01/12/2005

Health Savings Accounts Off To a Fast Start in the Individual Market (Slides) - [PDF]

Preliminary data from AHIP members show 438,000 people covered by September 2004.

View the full report. 

Reports/Research/White Papers | Center for Policy and Research | 01/12/2005

Individual Health Insurance: Wide Choice of Benefits Available - [PDF]

In July of 2003, the then-Health Insurance Association of America (HIAA) asked member companies active in the individual health insurance market to provide detailed data on the benefits provided under policies and certificates sold during the 12-month period ending on March 31, 2003.

Reports/Research/White Papers | Center for Policy and Research | 02/01/2004

Individual Medical Expense Insurance: Affordable, Serves Young and Old - [PDF]

A survey of in force individual health insurance policies to determine both the cost of coverage, and the distribution of covered individuals by age.

Reports/Research/White Papers | Center for Policy and Research | 07/09/2002