NCPA - National Center for Policy Analysis

Study Finds Affordable, Comprehensive Insurance Online

June 27, 2001

Health insurance coverage purchased directly by individuals and families is generally less expensive and more comprehensive than most policymakers believe, according to new research.

A study of 20,000 customers of eHealthInsurance, a Web-based health insurance distributor, shows average annual premiums of policies sold ranged from $100 to $125 per-member-per-month, or $1,200 to $1,500 per-person-per-year.

  • Eighty-eight percent of policies bought by individuals and 84 percent purchased by families were thought to provide "comprehensive" coverage, comparable to Medicare hospital and medical insurance plus some level of supplemental coverage.
  • Half the policies purchased through eHealthInsurance that would be eligible for a proposed tax credit carried premiums that would have been covered 100 percent by the tax credit ($1,000 for an individual and $2,500 for a family).
  • Three of every four policies charged premiums within 75 percent to 100 percent of the proposed tax credit amounts.

The deductible levels of policy purchases were also modest. For example, 45 percent of purchasers obtained a policy with deductible of $500 or less.

The analysis directly conflicts with results of a study by the Henry J. Kaiser Family Foundation that claimed health insurance policies offered to individuals -- even those with relatively few health problems -- often exclude coverage for the most needed care and are not affordable for those whose income is just above the poverty line.

Certain individuals, typically those who have pre-existing conditions, are near age 65 or live in the few states that require insurers to cover people with pre-existing conditions, do pay much higher premiums than the average, the eHealthInsurance study shows.

Tax credits may help many Americans obtain comprehensive coverage, reducing the number of uninsured, the company concluded.

Source: "The Cost and Benefits of Individual and Family Health Insurance Plans," Fact Sheet, June 2001, eHealthInsurance; "Americans Able to Buy Affordable, Comprehensive Insurance Online," Reuters Health, June 20, 2001.


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