The individual insurance market has traditionally attracted older, sicker individuals over younger, healthier people. Attracting customers who are in poorer health has traditionally led insurers to use medical underwriting to either avoid covering those with the greatest health needs, or pricing premiums to reflect their expected medical use. A new report points out, however, that the changing health care landscape has been pushing insurers to see the individual market as an area of potentially large growth. Insurance companies have therefore been pursuing strategies to attract younger, healthy consumers to the individual market.
The report, funded by the Robert Wood Johnson Foundation (RWJF) and compiled by researchers from the Center for Studying Health System Change (HSC), examines insurers’ strategies in 12 diverse communities tracked by HSC since 1996. According to the authors, the current strategies that insurers are pursuing are unlikely to meet the needs of less-than-healthy people who seek affordable, comprehensive coverage. The paper also explains that current health reform proposals, if enacted, would likely supersede insurers’ current strategies because they envision a sharply different regulatory environment for the individual market.