Dec. 3, 2007 -- Most people who try to buy health insurance on their own find that they either can't get it or can't afford it, even if they are relatively healthy, a yearlong investigation by Consumer Reports shows.
Of the roughly one in seven people surveyed who had no health insurance, 76% said they could not afford to buy it.
Only about 7% of those surveyed had purchased health insurance on their own, and 71% of these people were unhappy with their policies.
More than half cited high premium costs as a major reason for their dissatisfaction, and 45% said economic considerations had caused them to postpone needed medical care.
The report appears in the January issue of Consumer Reports, the publication of the nonprofit advocacy group Consumers Union.
"People who don't have access to employer-provided health insurance are at an extreme disadvantage," Consumer Reports Health Editor Nancy Metcalf tells WebMD. "We learned that private insurance is virtually out of the question for most uninsured Americans. This is a market that is completely dysfunctional from beginning to end."
The High Cost of Good Health
Cumming, Ga., real estate agent Maggie Frazier is all too familiar with the problem.
Diagnosed with rheumatoid arthritis in 1988, Frazier tells WebMD that she was virtually crippled by the disease until powerful drugs became available to treat it.
She now takes injections of the immune-system suppressing drug Enbrel, at a cost of $1,400 to $1,700 a month.
Her employer-provided health insurance picks up most of the tab, but Frazier is about to lose this coverage because the plan is being terminated. Most private health insurers she has contacted wouldn't cover her. The few that offered her insurance wanted to exclude her arthritis medications and any health problems she might develop related to her rheumatoid arthritis.
At age 60, Frazier now faces the economically ruinous prospect of paying for the drug out of pocket. She is also considering coming off the drug and going on full disability when her symptoms return.
"As long as I am on the Enbrel I am perfectly healthy. Most of my clients don't even know I have rheumatoid arthritis," she says. "But I've had the discussion with my doctor about what will happen if I have to stop taking it."
Insurance Rules Vary by State
Frazier's dilemma is increasingly common as individual health insurance becomes both harder to get and more expensive.
A big part of the problem is that rules for individual health insurers vary widely from state to state, Metcalf points out. Only a handful of states mandate coverage for everyone who seeks individual health insurance.
"Most people have no idea that their situation could be entirely different if they move to another state," Metcalf says.
She says people who take early retirement and move to sunbelt states often find themselves without coverage.
"These states generally have very poor consumer protection for people in the individual market," she says.
Paul Ginsburg, PhD, who is president of the nonprofit Center for Studying Health System Change, says a major overhaul of the individual health insurance market will be needed to fix the problem.
"For the individual market to work, both sick and healthy people need to participate," he says. "That is happening with group insurance, but not with individual insurance."
Educated Consumers Have an Edge
While the deck is stacked against most people looking for private health insurance, becoming educated about the process can improve the odds for many.
The Georgetown University Health Policy Institute's web site, www.healthinsuranceinfo.net, is one of the best sources of information about state rules regarding insurance for individuals, Metcalf says.
Other tips cited in the Consumer Reports investigation include:
- Be careful leaving your existing plan: Federal law allows you to extend your employer-based health coverage for 18 months after leaving a job by paying the full premium plus 2%. After that, the Health Insurance Portability and Accountability Act (HIPAA) may offer some protection.
- Research the market: Consumer Reports recommends the web site www.ehealthinsurance.com and your own state's insurance department web site to research available plans.
- Get needed benefits: Make sure the policy you buy covers the health problems you have or are likely to face in the future.
- Look beyond the premium: Annual deductibles, co-pays for doctor visits, and prescription drug costs should be considered along with monthly premium costs.
- Don't stop looking: People shopping for health insurance shouldn't expect insurance sellers to tell them about their options, Metcalf says. Just because you are turned down by one insurer doesn't mean you will be turned down by another. And you may be eligible for pool insurance available for those at high risk.