Individual Health Insurance Plays Important Role in Nation's Health Care System

Armen Hareyan's picture

Individual health insurance benefits

For millions of Americans seeking coverage, individually purchased health insurance is more accessible and affordable, and offers broader benefits, than widely known. Most applicants for coverage are approved without restrictions, and the benefits commonly purchased by consumers provide substantial financial protection.

Those are among the findings of a study examining the marketplace for individual major medical insurance released today by America's Health Insurance Plans (AHIP). The U.S. Census Bureau estimates more than 16 million non-elderly Americans obtained health insurance in the non-group market in 2003, the latest year for which they have data.

"The individual market is playing a vital and increasingly important role in our nation's health care system by providing access to coverage and substantial financial protection for millions of Americans who purchase insurance without employer sponsorship," said AHIP President Karen Ignagni.


Private sector health insurance plans are offering innovative products that are attractive to individuals purchasing coverage on their own and that address the needs of segments of the population that were previously uninsured, she said. Ignagni added that AHIP will make the information from the study available to policymakers considering the role of the non-group market in addressing the needs of Americans lacking health insurance.

The new study indicates the "typical" policy purchased by consumers in the individual health insurance market is a preferred provider organization plan with an annual deductible close to $2,000, annual out-of-pocket limits of about $4,000 and a lifetime maximum benefit of nearly $5 million.

But, according to AHIP, consumers purchasing individual coverage choose from a wide array of products, ranging from traditional indemnity plans and plans eligible for health savings accounts to coverage offered by health maintenance organizations.

AHIP found that in 2004 the annual premium for single coverage averaged $2,268 and the average annual premium for family coverage was $4,424.