Individuals Find Wide Price Spreads and Differing Benefits When Shopping for Insurance

Abstract:

Some 1.5 million people--5% of nonelderly Californians--are covered by individual health policies rather than group insurance, which is typically available only through businesses and other organizations. Researchers studied the individual health insurance products offered by the five major insurers serving this market (Blue Cross of California, Blue Shield of California, Health Net, Kaiser Permanente, and PacifiCare) and found a dizzying array of choices and prices that are often difficult to understand and compare. Depending on the geographic area of the state, up to 31 different benefit packages are available, with premium prices varying by hundreds of dollars per month. Price differences reflect in part the very broad range of available benefit packages; yet, prices vary considerably even when benefits are similar. There is no simple formula for choosing the best option, but close examination of the market offers insights that can help consumers make decisions.