tailieunhanh - Fundamentals of Underwriting in the Nongroup Health Insurance Market: Access to Coverage and Options for Reform

All estimates in this report are based on samples of 100 cases or more. Estimates are not shown for certain race groups, nor for children living with no employed adults, because these samples were too small. The tables in this report show estimated percentages of Wisconsin residents based on survey responses. These estimates should not be treated as precise results because they are derived from a sample. A 95 percent confidence interval (+) is printed in a column next to each percentage estimate; this means that 95 percent of similar surveys would obtain an estimate within. | NHPF Background Paper April 13 2005 NATIONAL HEALTH POLICY FORUM Fundamentals of Underwriting in the Nongroup Health Insurance Market Access to Coverage and Options for Reform Mark Merlis Consultant OVERVIEW Although the majority of Americans with health insurance obtain coverage through their employers many individuals must negotiate the nongroup insurance market alone. Insurers use a process called medical underwriting to identify applicants with current or recent medical problems. Because these applicants are likely to cost the insurer more in claims than a healthier person insurers may charge them higher premiums or restrict or deny coverage. This background paper reviews the practice of underwriting state and federal regulation of insurers offering nongroup health coverage and several proposed options for improving access to coverage for applicants who are in poor health. the GEORGE WASHINGTON UNIVERSITY WASHINGTON DC NHPF Background Paper April 13 2005 Contents INTRODUCTION. 3 BASICS OF UNDERWRITING. 4 Why Do Insurers Underwrite . 5 Table 1 Private Insurance Payments 2001 for People with and without Cancer Diabetes or Heart Disease at Start of Year. 5 How Do Insurers Obtain Information .7 How May Insurers Respond to High-Risk Applicants .9 How Many People Are Affected by Underwriting . 10 Table 2 Reported Action on Applications 11 Nongroup Health Insurers. 11 EXISTING REGULATION OF NONGROUP INSURERS. 13 HIPAA Nongroup Market Rules. 14 State Regulation. 15 Table 3 Number of States with Nongroup Market Rules 2004 . 15 IMPROVING ACCESS TO COVERAGE. 17 Stronger Regulation of Insurers. 17 Table 4 Effect of 50 Percent Rating Band on Rates for Nonelderly People with and without Cancer Diabetes and or Heart Disease 2001 . 17 High-Risk Pools. 19 Reinsurance. 21 Table 5 Effect of Reinsurance on Average Annual Private Insurer Payments 2001 for Nonelderly People with and without Cancer Diabetes and or Heart Disease at Start of Broader Promoting .