Health-insurance buyers lack safeguards, study says
By Maureen Groppe / Star Washington Bureau

WASHINGTON -- A report by a consumer advocacy group criticizes states for not doing more to protect consumers who buy health insurance through the individual market, rather than through their employers or the government.

Most states, including Indiana, don't require insurance companies to sell policies to all applicants, don't prohibit charging higher premiums based on health status, and don't require insurers to spend at least 75 percent of premium revenues on health care, rather than on marketing, profits and other expenses, according to Families USA.

However, Indiana is one of only seven states that the group says requires affordable coverage alternatives for those rejected by insurance companies.

"The individual health insurance market is still the wild, wild west for America's health-care consumers," said Ron Pollack, Families USA's executive director. "It is a market with many abuses and with far too few state-level consumer protections."

Pollack said the federal government needs to set a minimum level of protection that states can always add to.

He said the number of people buying insurance through the individual market is growing as employers drop or reduce coverage and as more people work part-time or as independent contractors.

Families USA surveyed state insurance departments and reviewed state laws to determine what consumer protections are in place in each state.

A comment from the Indiana Department of Insurance was not immediately available.

A spokesman for the insurance industry group America's Health Insurance Plans said a survey it released last year found that individual health care coverage is more affordable and accessible than widely believed.

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