Snapshot: Individual Health Insurance Market 2005

RAND

This snapshot highlights key findings from a study of consumer decision-making in the individual insurance market in California, examining a range of issues and exploring the potential effect of public policies on the individual market.

November 2005

With individual insurance premiums rising 40% from 1997 to 2002, the long-term viability of the individual insurance market may depend on finding ways to slow price increases, according to this California-focused snapshot of consumer decision-making in the individual insurance market.

This snapshot explores a range of issues related to individual health insurance coverage, including differences between the insured and the uninsured; product price and premium trends and variation; whether the market pools or separates healthy and sick; how long people continue coverage; and the potential effect of public policies on the individual market.

While choice is an advantage to individual subscribers, the study finds that consumers have differing levels of information at the time they make a coverage decision and end up paying different amounts for the same coverage. For example, nearly a third of purchasers report not having comparative information when they made a choice about coverage.

In addition, because individual insurance often represents more than transitional coverage (three in ten maintain coverage for more than three years), there is pressure on insurers to attract new, healthier subscribers to keep premiums low.

The complete survey and findings are available under Document Downloads below.