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The Individual Insurance Market

Options for Federal Reform

Implications for States


Karen Pollitz, Project Director, Georgetown University, Institute for Health Care Research and Policy, Washington, DC.

Karen Pollitz concluded the workshop by discussing the interface between reform at the Federal level and State individual insurance markets. She outlined how Federal actions might affect the number or type of people participating in the individual market or might change how State insurance markets are regulated (e.g., with Federal rating requirements).

Ms. Pollitz then reviewed what lessons might be drawn from the experience with implementing Health Insurance Portability and Accountability Act (HIPAA). She noted that, although HIPAA changed State small-group market rules significantly, the flexible Federal floor for group-to-individual portability left individual market rules largely undisturbed because most States used existing market rules to comply. She noted that one lesson learned from HIPAA is that imposing national standards on multiple insurance markets is difficult because the overlay of national standards on existing market divisions creates "cliffs," and different States interpret national standards differently.

Ms. Pollitz summarized the current Federal reform environment, noting the apparent irrelevance of budget surpluses, the political damage to both parties from past health reform initiatives, the trend toward proposals for incremental rather than sweeping change, and the tendency of those increments to become smaller. She then reviewed specific proposals that had been introduced or discussed, including individual market rating reforms, "health marts," a patient bill of rights, tax-deductibility of premiums for the self-employed, deductibility for other individuals, and refundable tax credits.

She remarked that Congress hasn't yet reached agreement on the direction it wants to take, but small, incremental change seems most likely. She also noted little enthusiasm at the Federal level for individual market reforms and that Federal policymakers will probably continue to look to States to experiment.


Pollitz K, Tapay N, Hadley E, et. al. The Health Insurance Portability and Accountability Act of 1996 (HIPAA): Early Experience with "New Federalism" in Health Insurance Regulation. Conference Draft. Institute for Health Care Research and Policy, Georgetown University. 1999; Washington, DC.

Current as of May 1999

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Internet Citation:

The Individual Insurance Market: Performance and Potential. Workshop Summary, May 3-4, 1999. User Liaison Program, Agency for Health Care Policy and Research, Rockville, MD.

The information on this page is archived and provided for reference purposes only.

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