Future Trends in Employer and Individual Insurance Markets

Featured Articles

Chollet D. Individual Health Insurance. Henry J. Kaiser Family Foundation. Forthcoming, 2002. Available at www.kff.org.
This fact sheet reviews the characteristics of the population that buys individual health insurance, its cost, and state regulation that affects its availability.

Gabel J, Levitt L, Pickreign J, Whitmore H, Holve E, Rowland D, Dhont K, and Hawkins S. Job-Based Health Insurance in 2001: Inflation Hits Double Digits, Managed Care Retreats. Health Affairs. 2001 September/October; 20(5): 180-186.
Drawing on the results of a national survey of 1,907 firms with three or more workers, this paper reports on several facets of job-based health insurance, including the cost to employers and workers; plan offerings and enrollments; patient cost sharing and benefits; eligibility, coverage, and take-up rates; and results from questions about employers' knowledge of market trends and health policy initiatives. Premiums increased 11 percent from spring 2000 to spring 2001, and the percentage of Americans in health maintenance organizations (HMOs) fell six percentage points to its lowest levels since 1993, while preferred provider organization (PPO) enrollment rose to 48 percent. Despite premium increases, the percentage of firms offering coverage remained statistically unchanged, and a relatively strong labor market has continued to shield workers from the higher cost of coverage.

Other Articles

Bunce, VC. Medical Saving Accounts: Progress and Problems under HIPAA. Cato Institute Policy Analysis. 2001 August 8; Number 411.
Medical savings accounts (MSAs) have shown that they can help health care consumers control costs, exercise greater choice in and control of their own health care, improve access to medical care, and increase personal savings. Early experiments with MSAs achieved modest success by the mid-1990s. The Health Insurance Portability and Accountability Act of 1996 established a five-year MSA demonstration project for small employers. HIPAA MSAs were handicapped by rules that limited their availability and growth over the last four years. The Bush administration's budget plan for fiscal year 2002 would remove HIPAA's cap on the number of MSAs and the restriction related to employer size. All employees and individuals covered by a high-deductible health plan would be eligible for MSAs. Expanding the availability of tax-advantaged MSA plans with high-deductible insurance could allow many Americans to economize on insurance costs, save for future medical and long-term-care expenses, and still remain protected against the risks of catastrophic illness.

Henry J. Kaiser Family Foundation. 2001 Annual Survey of Employer Health Benefits. Conducted by the Henry J. Kaiser Family Foundation and Health Research and Educational Trust. 2001 September. Available at www.kff.org.
This report is based on a survey of 2,734 randomly selected public and private employers, including 1,907 who responded to the full survey and 827 who indicated whether or not they provide health coverage. Premiums for employer-sponsored health insurance increased an average of 11 percent in 2001, the largest increase in premiums since 1992. With premiums rising and the economy slowing, the percentage of employers offering health insurance to their workers was flat after two years of growth, and businesses say they are likely to charge more employees for insurance in the coming year.

Jackson C. How Will Insurers Cover Post-Tragedy Care? American Medical News. 2001 October 22/29; 40(4). Available at http://www.ama-assn.org/sci-pubs/amnews/pick_01/bisa1022.htm#rbar_add.
According to this newspaper article, experts say that the Nation's primary care doctors can expect to see more patients needing treatment for mental health disorders as a result of September 11 attacks. Physicians lack faith that health plans providing mental health services are prepared to handle an increase in need. Insurers say they are ready for an influx of patients.

Maxwell J. Corporate Health Care Purchasing Among The Fortune 500. National Health Care Purchasing Institute Monograph. 2001 May. Available at www.nhcpi.net.
This report presents the results of the first academic study of health purchasing practices used by large companies to address the ongoing challenge of managed care. The study achieved a remarkable 84 percent response rate among the Fortune 500.

Meyer JA, Tillman IA. Building Quality Improvement Into Defined Contribution Strategies. National Health Care Purchasing Institute Monograph. 2001 September. Available at www.nhcpi.net.
Several developments have prompted employers to take a look at the defined contribution approach to health care. This monograph examines its impact on quality.

Mirel LH. We Call It Insurance, But That's Not Healthy. The Washington Post. 2001 August 26: B2.
This opinion piece by the District of Columbia's Commissioner of Insurance and Securities points out flaws inherent in the current system for paying the costs of health care and argues for a two-tier health benefit model consisting of catastrophic illness insurance and medical savings accounts for routine health care.

Strunk BC, Ginsburg PB, and Gabel JR. Tracking Health Care Costs. Health Affairs. Web Exclusive. 2001 September 26. Available at www.healthaffairs.org.
This paper provides an update on trends in health care costs since 1999. Although the growth rate in overall costs has been stable since 1999, the trend in costs for hospital services rose, while that for prescription drugs declined, although it remains extremely high. Increased growth in hospital costs reflects the retreat from tightly managed care and labor shortages. The discrepancy between premium trends and cost trends has increased, which reflects the health insurance underwriting cycle. If these trends continue, likely responses by employers would lead to consumers' facing higher out-of-pocket costs and an increase in the number of uninsured persons.

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