More Health Insurers Competing In Individual Coverage Market

In a crisis of 47 million uninsured and a sagging economy, consumers in Connecticut and around the nation are finding one good sign in the much-maligned health care system — growing competition in the sale of individual policies.

As more people under 65 are forced to shop for their own insurance, they'll discover more companies competing in the individual market than a few years ago. The result is a dizzying array of policies, and a broader spectrum of prices.

The intensifying rivalry increases the chance of consumers finding something they can afford, but it won't help everyone.

Insurers are continuing to reject people with chronic medical problems and charge premiums that many others still can't afford. But rather than wait for health care reform as efforts lurch forward and back, some consumers could benefit by taking a second look at individual policies.

Companies including Anthem Blue Cross, Aetna and ConnectiCare have launched suites of individual policies in recent years and are heavily promoting them. Aetna sold individual plans in five states in 2005, but now offers them in 29, including Connecticut.

CIGNA expects to begin offering individual plans in Connecticut next year, and the state's new Charter Oak Health Plan could be an option for some uninsured residents.

The newer players join such longtime sellers as Golden Rule Insurance Co. — now part of UnitedHealth Group — and Assurant Health. As of 2006, 17.7 million Americans under 65 had individual policies, according to the Employee Benefit Research Institute.

"There is definitely more competition, more players entering into the market and more products available than ever before," said Patrick Quirk, product director for individual markets at Anthem Blue Cross and Blue Shield in Connecticut.

Prices vary from company to company, but an individual policy can go for about $1,400 a year in Connecticut if you're in your 20s, healthy and accept a high deductible. The cost can top $8,800 if you're 60 to 64 and want a low deductible. If you have medical problems, but aren't rejected, you're likely to be charged 25 to 50 percent or more above standard rates.

Premiums depend on age, gender, health, and geography. And the higher the co-pays, deductibles and other consumer cost-sharing is, the lower the premiums.

Wooing A Wary Public

Insurers have targeted individuals of all ages, but are especially keen on early retirees and people in their 20s through early 30s — the "young invincibles" who risk going without coverage, believing no calamity will befall them.

Companies that used to focus largely on the employer market now view individuals as a new revenue source as employers struggle to maintain employee benefits, drop retiree insurance and lay off workers.

"We are in a mature insurance market and some of the biggest potential is in the individual market, and all the insurers recognize that," said Stephen Jewett, a spokesman for Farmington-based ConnectiCare.

It may be a challenge, however, for the industry to win over a wary public.

"I'm very skeptical of individual markets," said Ellen Andrews, executive director of the Connecticut Health Policy Project, a nonprofit research and education organization. "It may get better, but it's so bad that they've got a long way to go before it gets to what we have in the small group market."

In the small-employer market, insurers in Connecticut and some other states are prohibited from rejecting a small firm because of its workers' medical problems or basing the firm's rates on the health of its employees.

Andrews said competition in the individual market is fine, but "I worry that it's going to be a clash of marketing and not based on providing affordable benefits."

The industry is sensitive to allegations that it's making windfall profits at the expense of consumers.

Quirk, at Anthem, said the company has found through studies that people believe health insurers score wild profit margins, such as 30 percent.

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