Survey: Premiums Jumped by 20% for Individual Policyholders

U.S. residents who purchase their own health insurance faced premium increases averaging 20% when they last renewed coverage, according to a Kaiser Family Foundation survey released on Monday, the New York Times reports.

The results underscored that consumers in the non-group market will face challenges until consumer protections in the new health reform law are implemented, analysts said. About 14 million U.S. residents under age 65 purchase their own health insurance (Abelson, New York Times, 6/21).

The survey was based on responses from 1,038 individuals ages 18 to 64 gathered between March 19 and April 2.

Survey Findings

According to the results, 77% of respondents said they faced a rate increase from a current or prior insurer, prompting 16% to switch plans or insurers. However, four times as many individuals who switched plans said their new plan offered worse coverage as those who said it offered better coverage.

In addition, the report identified lapses in the adequacy of coverage available in the individual market. For example, 22% of respondents said they or a family member did not receive necessary medical care during the past year because of cost, while 20% said they did not fill a prescription for similar reasons (Reichard, CQ HealthBeat, 6/21).

Individuals reported paying an average of $3,606 in annual premiums, but also said they carried an average deductible of about $2,500. Twenty-five percent of respondents said their annual deductible was $5,000 or more.
Drawing More Attention to Rate Hikes

The report comes as several large insurers face criticism for proposing steep premium increases, including WellPoint's Anthem Blue Cross of California, which in February proposed rate hikes of up to 39% for individual policyholders.

KFF President and CEO Drew Altman said, "The survey shows that the steep increases we have been reading about over the last several months are not just extreme cases" (New York Times, 6/21).

Possible Effects of Reform Law

KFF analyst Gary Claxton said several provisions of the new reform law could help curb costs for individual insurance plan consumers, including premium subsidies, out-of-pocket cost limits, protection for those with pre-existing conditions and a more competitive marketplace when insurance exchanges are established in 2014.

However, America's Health Insurance Plans spokesperson Robert Zirkelbach said he does not expect increases to abate "because medical costs are continuing to soar, and there's nothing to bring those costs down" (CQ HealthBeat, 6/21).