Policy Documents

Insurance Reforms Must Include a Strong Individual Mandate and Other Key Provisions to Ensure Affordability

Oliver Wyman –
October 14, 2009

The nation is seeking effective solutions to meet the goals of improving the affordability of health insurance, extending coverage to many of the 45.6 million uninsured and reforming a fragmented healthcare delivery system. Central to the debate over healthcare reform in Washington is how to make health insurance more accessible and affordable for millions of Americans who purchase
coverage in the individual market, as well as for small employers.

Legislation pending before Congress includes significant reforms to health insurance industry practices in both the individual and small group markets. These reforms would require insurers to: 1) offer coverage on a guaranteed issue basis without any pre-existing condition exclusions, 2) discontinue rating on health status and gender, 3) limit how much premiums vary because of age,
and 4) sell only insurance policies that meet at least new minimum benefit levels.

We modeled the impact of these provisions, along with a variety of other changes included in pending bills, including subsidies, grandfathering, and reinsurance, to estimate the impact on insurance premiums in the individual and small group markets. We have done this on a national level and by state groupings based on their current state insurance rules.