An Analysis of the Distribution of Cost-Sharing Levels in Individual and Small-Group Coverage

When talking about health reform, many policy-makers say their goal is to allow Americans who are happy with their coverage to retain their existing plan, or to obtain coverage that is at least equivalent in terms of benefits. To meet this goal, they must understand how benefits packages are structured. While much attention has been paid to large group policies, little attention has been paid to how health benefits are structured for individuals purchasing health care coverage in the small group or individual markets. A new paper from Changes in Health Care Financing & Organization (HCFO), an initiative of the Robert Wood Johnson Foundation, finds a gap in health insurance costs between individual and small group health insurance coverage rates and the rates offered in plans provided by larger firms. According to the researchers, individuals choosing from small group plans typically pick plans with a $1,000 to $1,500 deductible and those enrolled in individual plans typically have deductibles between $2,000 and $2,500. In contrast, most enrollees in insurance plans provided through a larger employer choose plans with deductibles between $500 and $1,000. The research analyzes survey data provided by America’s Health Insurance Plans.

A corresponding policy brief released by HCFO explores the role of benefits design in the current health care debate. The brief looks at the history of health care benefits and discusses current benefit design tools being used to address rising health care costs.