Sunday, July 26, 2009

Individual market for health insurance

Many people have suggested that if we mandate health insurance and leave it to the market that the market could be more like auto insurance. As I've pointed out in the blog before, maybe and maybe not. One thing that suggests at least "no so fast" is a recent report from the Commonwealth Fund.

The report suggests that the individual insurance market is not a viable option for most US families. If we reword that a little, we could say that the market as it exists at present is not a viable option for most US families.

What would have to change? Mostly that the plans would be more affordable, at least based on the report. What could possibly make them more affordable--more competition, better information for consumers, and a basic clearinghouse approach for all the information about all the options might be a start. More standardization of plans and claim forms might also help. The key would be to allow people to have some level of choice of plans that can compete on price and service while limiting some choices to help make the market more transparent for all who need to buy in that market. It might make an individual market a little more viable for at least some of the families, and I might be willing to argue that it could make a dent in the uninsurance problem. In that case, a market may work. It just would not be today's market.

1 comment:

  1. You would also need tight regulation to ensure that the policies are worth the paper they are written on. Also there would need to be a mandate. There is a mandate for auto insurance, but a large percentage of people buy policies and then never renew.