INSURANCE REFORM: A Mixed Bag, Says Report
Laws passed in recent years to help small employers and individuals purchase health insurance have been both beneficial and detrimental, according to a Wake Forest University School of Medicine study. The three-year study found that state and federal mandates -- such as guaranteed issue, renewability and portability, restrictions on preexisting condition exclusions and pricing, and risk-sharing pools -- have helped older, sicker people obtain coverage if they can afford it, but have had little benefit for the small employer and individual markets. Specifically, the study found that the new laws increased competition among insurers in the small-group market by prohibiting them from denying coverage or raising rates for high- risk groups. But in the individual market, the reforms diminished competition as many insurers pulled out of unprofitable markets. The study also found that some of the most innovative reforms, such as purchasing cooperatives, have been little used, and that individual insurance agents are key to making reforms work. The study, funded by the Robert Wood Johnson Foundation, involved in-depth interviews with insurance industry sources and regulators in a cross-section of seven states -- Colorado, Florida, Iowa, New York, North Carolina, Ohio and Vermont -- and included a market test in which a small employer with an unhealthy member inquired about coverage options. Detailed reports on each state are available on the Internet at www.phs.wfubmc.edu/insure/ (Wake Forest release, 3/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.