Aetna's recent decision to start selling individual health insurance in Florida signals that the market once left for dead is in the throes of being reborn. About one million Floridians are covered by individual policies — a tiny fraction compared to group health insurance business. That means there is plenty of room to grow, and many agents and insurance officials say demand is picking up.
Several factors are fueling the resurgence, including new high-deductible policies in Health Savings Accounts (HSAs) that allow insurers to offer more affordable premiums. Also, the surging price of group health insurance — costs have been going up by double-digit rates for the past four years — is leading many employers to drop coverage or drop dependent coverage. As a result, many are turning to individual policies to fill the gap. And finally, the sheer number of uninsured in Florida — now at 3.2 million or 19 percent of the population — is causing the demand for individual policies to grow.
The growth in individual policies in Florida matches a nationwide trend. The number of people buying health insurance on their own jumped by nearly one million, to 17 million from 2000 to 2004, according to Mathematica Policy Research.
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