Ask the Expert: Peter Harbage on the Broken Individual Health Insurance Market

How are individual market health plans different from employer-sponsored insurance?

On the employer market you have a situation where people are coming together to buy insurance as a group, and as a result they get a better deal, and they can get better protections from the insurance industry. When individuals go to insurance companies, they don't have the same benefits. They're negotiating prices by themselves, and state regulations, when it comes to the individual market, are much weaker. And so you have a situation where individuals can find themselves thinking they have coverage, and they really don't. You also have a situation where individuals will pay more and get less from insurance companies than do businesses.

What affect does the broken individual market have on health care in general?

You have a situation where today there are 14 million people who get their insurance though the individual market, and you have tens of millions more than that who try to get coverage through the individual market and can't because they're blocked out of the system--they have a - condition, or they can't afford the higher premiums that come with the individual market. Some one of the effects--the primary effect of the individual market and what it means for health care--is you leave tens of millions of people uninsured because they can't find the health coverage they need.

Would health reform help mend problems with the individual insurance market?

Health reform will absolutely help address the address the issues that we have in the individual market. One of the core concepts is the idea of an exchange where individuals would come and be able to buy their insurance--either private insurance or a public plan option--through one central portal that will both make sure that they have additional consumer protections and will help pool individuals together to make sure they can get a better deal from insurance companies instead of being on their own. Another important point is that by fixing what's wrong in the individual market, that we will be able to get the 50 or so million uninsured people into insurance.

This means a couple of important things. One, they will consistently be able to get care throughout the year for chronic diseases that they may have. So they're be able to avoid unnecessary hospitalizations and unnecessary ER use by making sure that people are getting the daily care and the preventative car that they need. It also means that y increasing the number of people with insurance, that you reduce something called the cost shift, or what some refer to as the hidden tax. The idea that if the uninsured go to the emergency room, and if they receive care there, but then can't afford the high prices, that those costs are passed on to everyone else with insurance. By making sure that everyone has insurance, you can eliminate the hidden tax.