Most People Shun Individual Insurance

Anyone who's ever investigated buying an individual health insurance policy won't be surprised to hear that the vast majority of people say "no thanks" to such coverage, even when they can't buy insurance through an employer. A new analysis, released Monday by the Kaiser Family Foundation, found that this is not only true for lower-income people—those who earned up to 250 percent of the poverty level, or about $47,000 for a family of four—but also for those who made much more.

The percentage buying coverage did rise as incomes grew, but even at four times the poverty level (roughly $38,000 for an individual or $75,000 for a family of four) only about a quarter of people who didn't have other insurance options bought individual policies.

The study didn't examine why people decided to go without. But it's easy to make some educated guesses. Deductibles and copayments are often higher in these plans, and the coverage is often far from comprehensive—assuming you can get approved in the first place. There are a whole range of conditions that are almost certain dealbreakers for applicants, from diabetes to cancer. Carrying an extra 20 pounds, even acne, can be grounds for denial, says Karen Pollitz, a project director at Georgetown University's Health Policy Institute.

The study coincides with a story I wrote that appears in this week's magazine (February 11 issue) on the perils of individually purchased insurance. Have you or your family members had bad experiences with an individual plan?