Could the uninsured buy insurance?

What’s Behind It?

In California, as in the country as a whole, most people with coverage obtain it either through employment or through public coverage programs such as Medicare and Medi-Cal. But an individual market for coverage exists as well. About 8% of California adults purchase coverage through the individual market, and that market may be the only option for many of California’s uninsured, including the self-employed, other workers not offered coverage, and the non-working. Therefore, the individual market has been proposed as an important vehicle for expanding coverage.


The Broader Picture

California law does not guarantee access to coverage through the individual market, so consumers can be denied coverage outright. Health insurance carriers typically require a health screening when consumers apply for coverage. Depending on screening results, applicants can be denied coverage outright, charged higher premiums, or offered more limited benefits based on their health status. For example, many individuals who have had cancer or have heart disease are denied coverage; even individuals with a history of a chronic condition they no longer have, such as asthma, can be turned away.

Even for Californians who can get coverage, it may be available only at prices that most would consider unaffordable. Although California has a state-run pool for those who have been denied coverage on the individual market (the Major Risk Medical Insurance Program, or MRMIP), premiums through that pool average over $450 per month; annual benefits are capped at $75,000; and enrollment can be limited by the availability of state funds. One national survey found that most people seeking coverage in the individual market found it difficult or impossible to find affordable options.


The Bottom Line

Today, California’s individual market is a viable choice for only a subset of the uninsured. Before relying on the individual market for widespread coverage expansion, policy changes to address access and affordability are needed.

Have a question, concern, or idea? Email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .


For More Information 

• RAND, Snapshot: Individual Health Insurance Market 2005, 11/05.
• Deborah Reidy Kelch, Rules Governing California’s Individual Health Insurance Market, 4/05.
• California Major Risk Medical Insurance Program, 2007 Application and Handbook.
• The Commonwealth Fund, Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families, 9/06.