Press Release

Embargoed Until Contact

May 23, 2012

Sue Ducat
Director of Communications
(301) 841-9962


From Health Affairs


New Study Finds That 51 Percent Of Americans With Individual Health Insurance Will Improve Their Coverage In 2014 Through The Health Exchanges


Bethesda, MD -- More than 11 million Americans below the age of 65 are now covered by private individual health insurance plans. A new study, released today by Health Affairs as a Web First, measured the actuarial value (the percentage of medical bills an insurance company pays) for a sample of 2010 health plans offering group and individual policies, and found that the majority of individual plans fell below the minimum standards and benefits required by the Affordable Care Act of 2010.


The Affordable Care Act sets up four tiers of health plans for consumers to purchase, ranging from “platinum” (90 percent actuarial value or better) to “bronze” (60–69 percent). According to authors, the average actuarial value for group health insurance plans was 83 percent—safely in the “gold” range. For individual insurance plan values, they found that 51 percent of the policies they examined had an actuarial value of less than 60 percent, the bottom of the “bronze” range. These “tin” plans had benefits and values below the minimum requirements established under the Affordable Care Act for future state-based exchanges.


More Than Half Of Individual Health Plans Offer Coverage That Falls Short Of What Can Be Sold Through Exchanges As Of 2014

By Jon R. Gabel, Ryan Lore, Roland D. McDevitt, Jeremy D. Pickreign, Heidi Whitmore, Michael Slover, and Ethan Levy-Forsythe

Gabel, Pickreign, Whitmore, and Levy-Forsythe are affiliated with the Health Care Research Department at the social science research organization NORC at the University of Chicago, in Bethesda, Maryland; Lore, McDevitt, and Slover are with Towers Watson, in Arlington, Virginia.

This study, which will also appear in the June issue of Health Affairs, was supported by a grant from The Commonwealth Fund.


The authors used data from the Kaiser Family Foundation/Health Research and Educational Trust 2010 Employer Health Benefit Survey for its group plan analysis. For individual plan data, the authors sampled enrollment data in five states through interviews with marketing managers of the different insurance carriers. Data on plan characteristics, such as deductibles and copayments, were obtained from public websites, such as eHealthInsurance.


For each plan in the individual and group database, the researchers conducted simulated bill paying to determine the amount of the bill paid by the plan and the beneficiary. The average out-of-pocket expenses were $1,765 for those enrolled in group plans, compared to $4,127 with individual plans. Very sick patients—those in the top 1 percent of medical spending—paid $3,763 in platinum plans, compared to $27,435 for those in the “tin” individual plans. “Individual insurance design does not meet exchange standards for the majority of covered lives,” conclude the authors. “To sell to ten million new buyers on the exchanges, insurers will need to redesign benefit packages. The individual insurance market in a post–health reform world will sharply contrast with the market of past decades.”

About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.

The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.