Sustaining Individual Health Insurance Markets Under Community Rating and Open Enrollment
What is the extent of risk selection in New Jersey 's Individual Health Coverage Program (IHCP), which was implemented in 1992 as part of the state's individual market reforms? What are the policy options for sustaining access to individual health plans and describing the role of the non-group coverage in New Jersey's health care insurance market? Using data from the Robert Wood Johnson Foundation-funded New Jersey Family Health Survey (NJFHS), the researchers aimed to answer the following questions: 1) How has the distribution of risk changed in the IHCP since 1995-1996 and what are the implications of those changes for the viability of community rating and related reforms? 2) What is the potential impact on current or potential IHCP enrollees of adopting modified community rating? and 3) What role does the IHCP play in the continuum of coverage in New Jersey? The objective of this study was to analyze changes in New Jersey’s individual insurance market to inform state policymakers considering reforms to make non-group markets accessible and viable. The researchers supplemented the NJFHS data with a sample of 600 non-group subscribers (subscriber lists provided by top 4 or 5 carriers in state who covered 95 percent of lives in the individual market). Using the same methodological approach utilized by Katherine Swartz, Ph.D., and Deborah Garnick, Sc.D., in the early years of the IHCP, they assessed the risk of medical expenditures of adult IHCP enrollees compared to that of a contrast population composed of individuals with non-small-group employment-based insurance. They also compared the IHCP enrollees with the entire employer-group market and the uninsured.