Market Failure? Individual Insurance Markets For Older Americans

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Abstract
This study examines the viability of tax credits and nongroup markets for covering uninsured adults ages fifty to sixty-four. We find that adults in this age group covered by nongroup plans tend to be healthier and wealthier than the average for their peers, yet more of them go without care and experience high medical bills relative to their incomes. Individual-market premiums rise steeply with age in most states and are well above employer-group rates. Costs are likely to be unaffordable for most uninsured older adults, even with large tax credits or in states with community rating. These findings indicate a need to include risk and age pooling to reach the uninsured in this age group.