Background Paper

Fundamentals of Underwriting in the Nongroup Health Insurance Market: Access to Coverage and Options for Reform
April 13, 2005


Mark Merlis, Consultant


Although the majority of Americans with health insurance obtain coverage through their employers, many individuals must negotiate the nongroup insurance market alone. Insurers use a process called medical underwriting to identify applicants with current or recent medical problems. Because these applicants are likely to cost the insurer more in claims than a healthier person, insurers may charge them higher premiums or restrict or deny coverage. This background paper reviews the practice of underwriting, state and federal regulation of insurers offering nongroup health coverage, and several proposed options for improving access to coverage for applicants who are in poor health.

Related Materials

See also "Underwriting, Rating, and Regulation in the Individual Market" (Small-Group Session, December 3, 2008).

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