People who buy health insurance on their own facing steep hikes

A model posing as a nurse in a surgical mask

Health insurance premiums for individuals are rising much faster than those for employer-sponsored plans as insurance companies grab profits before health care reform kicks in. Flickr photo.

Health insurance premiums for people who buy coverage on their own are soaring, according to a study released Monday. While lawmakers debated the health care reform bill, health insurance companies were busy trying to make as much money as they could before the law’s provisions kick in. Individuals facing sharp increases in their insurance premiums are trying to save money by settling for fewer benefits and higher deductibles. Meanwhile, steadily rising insurance premiums, the recession and a drop in the number of employers offering health coverage swelled the ranks of the uninsured by nearly 3 million people in 2009.

Health insurance cost trends

Premium hikes for health insurance for individuals far exceed increases in the premiums for employer-sponsored coverage, according to a new survey on health insurance cost trends from the Kaiser Family Foundation. The Associated Press reports that the non-profit foundation said premium hikes for individual coverage averaged 20 percent. Customers who were able to switch to cheaper plans brought the average increase in what individuals are paying for  health insurance down to 13 percent. This year’s individual health insurance premium spike tops last year’s 5 percent average increase for employer-sponsored family coverage. Health insurance cost trends for employer-sponsored single coverage held steady.

Expensive health insurance for individuals

The rising cost of health insurance for individuals made news earlier this year when Anthem Blue Cross tried to raise its rates by as much as 39 percent in California. The New York Times reports that the Kaiser study sheds light on how widespread these premium hikes are. The New York Times reports that when the proposed Anthem hikes were met with outrage from federal and state officials, there was little information about how widespread such increases were in other parts of the country. Drew Altman, the Kaiser foundation’s president and chief executive, told the Times that “The survey shows that the steep increases we have been reading about over the last several months are not just extreme cases.”

Health care reform a long wait

The Kaiser survey highlights the challenges that about 14 million people younger than 65 who purchase their coverage in the individual market will face until changes under the health care reform law kick in 2014. By then, all Americans will be required to have health insurance or risk paying a fine. In the meantime, 52 percent of respondents in the Kaiser survey who buy individual health coverage said they would keep their current plan next year, while 32 percent said they were not sure. Another 14 percent said they would switch companies in hopes to cut costs.

Health insurance plans have high deductibles

To save money, people are switching their individual health insurance plans to higher deductibles. The survey reported that the average deductible for individual plans is about $2,500. One in four people said their plan had an annual deductible of $5,000 or more. The number of those with high deductibles has risen from 39 percent in 2007 to almost 47 percent in 2009.

Millions losing health insurance coverage

For the 2.9 million U.S. adults who joined the ranks of the uninsured in 2009, health care reform does little to help them with their current needs. USA Today reports that in 2009 — the latest statistics available — 46.3 million American adults had no health insurance coverage, according to a new report from the U.S. Centers for Disease Control and Prevention. That’s about one in five working-age adults with no health insurance coverage. The percentage of uninsured adults of working age climbed from 19.7 percent to 21.1 percent in 2009, and 58.5 percent of American adults went without insurance for at least part of the year.

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