According
to the US Census Bureau, about 9% of Americans are covered under health
insurance purchased directly.[51] The range of products available is similar to
those provided through employers. However, average out-of-pocket spending is
higher in the individual market, with higher deductibles, co-payments and other
cost-sharing provisions.
Major medical is the most commonly purchased
form of individual health insurance. Although a major medical health insurance
policy is primarily a catastrophic plan, qualified preventive benefits are
still covered at 100% without any waiting period or copay.
In
the individual market, the consumer pays the entire premium without benefit of
an employer contribution. While self-employed individuals receive a tax
deduction for their health insurance and can buy health insurance with
additional tax benefits, most consumers in the individual market do not receive
any tax benefit.
Premiums
vary significantly by age. In states that allow individual medical
plan underwriting, premiums also vary by health status. However, with the
Patient Protection and Affordable Care Act, effective by 2014, all insurers
will be fully prohibited from discriminating against or charging higher rates
for any individuals based on pre-existing medical conditions.
In
August 2008, the Hartford Courant reported that competition was increasing in
the individual health insurance market, with more insurers entering the market,
an increased variety of products, and a broader spread of prices.
Individual
health insurance is primarily regulated at the state level, consistent with the
McCarran-Ferguson Act. Model acts and regulations promulgated by the National
Association of Insurance Commissioners (NAIC) provide some degree of uniformity
state to state. These models do not have the force of law and have no effect
unless they are adopted by a state. They are, however, used as guides by most
states, and some states adopt them with little or no change.