Insurers are embracing the individual market, spurred by reductions in the number of people covered by employer-sponsored coverage and the likelihood that many people receiving government assistance with their coverage are in the individual market.

Paul B. Ginsburg

The findings from the Center for Studying Health System Change suggest that ongoing debate about comprehensive health reform in the U.S. is already influencing health insurers.

The study, funded by the Robert Wood Johnson Foundation, reveals that insurers are pursuing strategies to tap the growth potential of the individual health insurance market, including entering less-regulated markets and developing lower-cost, less-comprehensive products targeting younger, healthy consumers.

“If enacted, current health reform proposals, which envision a larger role for the individual market under a sharply different regulatory framework, would likely supersede insurers’ current strategies,” said HSC President Paul B. Ginsburg, co-author of the study, in a statement.

If current plans for health care reform are approved, the individual insurance market could be transformed. Subsidies for lower- and moderate-income people to buy insurance, creation of insurance exchanges and much stricter regulation of the individual market would change the market, as would proposed regulatory changes, including a mandate for individuals to be covered, guaranteed-issue requirements and a ban on medical underwriting, the study found. Products standardized by actuarial value, or the covered medical expenses estimated to be paid by the insurer, could also alter the market as well.

This story originally appeared in the December 2009 print edition of Insurance & Financial Advisor.