Individual Health Coverage

Key Questions

What is the Individual Health Coverage Market?

This market, sometimes called the “non-group market,” includes any health insurance policies directly purchased by an individual rather than through a group, such as an employer.

How Many People Are Covered in the Individual Health Coverage Market?

A total of 26.777 million had direct-purchase health insurance in March 2009 (DeNavas-Walt: Table C-3). However, 10.103 of these were age 65 or older–the vast majority of which represented Medicare supplemental policies intended to cover gaps in Medicare coverage–leaving 16.6 million non-elderly covered by this market.

But the potential market for such coverage arguably also should include any uninsured who theoretically could have purchased coverage in this market, but did not. There were 45.7 million nonelderly uninsured in March 2009 (DeNavas-Walt: Table C-3); in 2008, 82.6% of such individuals were in families headed by full- or part-time workers (Fronstein: Figure 9). However, only 20.9% of uninsured workers turned down coverage offered to them (Fronstein: Figure 18), implying that only 17.4% of the uninsured under 65 have theoretical access to employer-provided coverage, leaving 38.3 million non-elderly uninsured and up to 646,000 elderly uninsured (DeNavas-Walt: Table C-3) whose only source of private insurance would be in the individual market. So leaving aside the elderly who purchasing supplemental coverage, the total market for persons potentially seeking stand-alone individual health coverage was about 55.6 million in 2009.

Using SIPP data to  look at coverage over a whole the year, Claxton et al. conclude:

  • Full-Year vs. Part-Year Coverage. About 22.6 million nonelderly people had nongroup coverage in at least one month during 2011. Of these, 6.8 million people had nongroup coverage as their only type of coverage (other than being uninsured) during 2011, including about 5.1 million people who had nongroup coverage (and no other type of coverage) in all 12 months of 2011.
  • Turnover.
    • If we start with people who had only nongroup coverage in January, 2010, 62% still had only nongroup coverage in July, 2010, 56% still had only nongroup coverage in December, 2010, and 48% had nongroup coverage only in December, 2011.
    • These percentages fall, however, if we look only at people who are continuously covered by nongroup coverage (e.g., they are covered by nongroup coverage for every month across the periods considered). Starting again with people reporting nongroup coverage only in January, 2010, 56% were continuously covered by nongroup coverage through July, 2010, 44% were continuously covered by nongroup coverage through December, 2010, and 31% were continuously covered through December, 2011.

Using Current Population Survey data, Claxton et al. conclude:

  • The number of nonelderly people who report having coverage purchased directly from an insurer as their only source of coverage is about 11 million in 2011. This is similar to the SIPP estimate of 11.3 million people with nongroup coverage only in the Fall of 2011.
  • The equivalent figures for 2012 are 11 million (CPS) and 10.9 million (SIPP).

References

  • Claxton, GaryLarry LevittAnthony Damico and Matthew Rae. Data Note: How Many People Have Nongroup Health Insurance? Kaiser Family Foundation, January 03, 2014. This brief discusses coverage estimates from two national surveys often used to analyze health coverage: the Survey of Income and Program Participation (SIPP) and the Annual Social and Economic Supplement of the Current Population Survey (ASEC).
  • DeNavas-Walt, Carmen, Bernadette D. Proctor, and Jessica C. Smith. U.S. Census Bureau, Current Population Reports, P60-236, Income, Poverty, and Health Insurance Coverage in the United States: 2008, U.S. Government Printing Office, Washington, DC, 2009. [Full Text (pdf)]
  • Fronstin, Paul. Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 2008 Current Population
    Survey
    . EBRI Issue Brief, no. 321 (Employee Benefit Research Institute, September 2008). [Full Text (pdf)]
  • Pauly, Mark V.  and Robert D. Lieberthal. How Risky Is Individual Health Insurance? Health Affairs Web Exclusive, May 6, 2008, p. w248.

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