AUGUST 30, 2005 -- Uninsured workers aren't likely to purchase individual health insurance, even if they are offered subsidies that would lower their premiums, a Congressional Budget Office report says.
The report, released Aug. 26, found that insurance prices do not have a significant impact on whether workers—who don't have health insurance available through their employers—purchase it.
A 10 percent cut in insurance premiums would only increase health insurance coverage in the individual market by 5.7 percent, according to the report.
Government efforts for getting uninsured people to jump onto health insurance plans have targeted the private insurance market, including tax credits and other price-based incentives. The Bush administration in its 2006 budget has proposed offering tax credits for lower-income individuals looking for individual health insurance in its 2006 budget.
Out of the 1,718 individuals surveyed in the report, only 16 percent have individual health insurance plans, most of whom are women, white, older and with higher income and education level. Self-employed individuals are more likely to get nongroup insurance.
The report found that lower insurance prices would attract poorer individuals, who face a lower initial coverage rate. Individuals with nongroup insurance have premiums that are 10 percent to 25 percent lower than premiums for uninsured people.
However, less-healthy individuals and those whose incomes do not fall below 200 percent of the federal poverty level would be less responsive to changes in individual health insurance prices, the report found.
A study released Monday by America's Health Insurance Plans, which represents companies providing health insurance, said the individual insurance market provides coverage and financial support for individuals who do not receive insurance through their employers. The study found that individual health insurance offers products that attract individuals purchasing coverage on their own.