In order to keep premiums affordable, HIPs are often authorized to impose a small assessment on the premiums earned by private insurers. HIPs accomplish the social goal of assuring access to quality medical care for those who need it, without the disruptions and negative side effects caused by regulation of the insurance industry. Ordinary insurance markets may not work for people with pre-existing medical conditions. More than 187 million Americans rely on private health insurance for their health care needs. In many states, the answer is state-chartered Health Insurance Plans.
HIPs provide affordable health insurance without regulation or bureaucracy.
Many states are attempting to ensure access to medical care for the medically uninsurable simply by forcing companies that sell individual health insurance to write policies for them. By doing so, those states are creating serious problems for the vast majority of their residents who do not suffer from medically uninsurable conditions. Recent studies show that such regulations increase premiums, increase the number of uninsureds in a state, and do serious damage to the insurance marketplace. The people in the individual market comprise a very small area at the bottom of this inverted pyramid. When financed by small assessments on the premiums paid to private group insurers, HIPs spread the cost of covering uninsurables across a much larger base of insureds.