Abstract
Despite the widely held belief that states lack power to alter insurance companies' behavior, New Jersey's individual health insurance market reform unearthed ways for states to expand coverage. Since August 1993 New Jersey has successfully operated the Individual Health Coverage Program. The IHCP reforms forced changes in 5 areas: 1. insurers are sharply limited in their ability to choose whom they will insure, 2. all carriers selling health insurance in New Jersey must either offer policies in the individual market or share in the losses of carriers that do sell policies and incur losses, 3. carriers in the market may only sell up to 6 types of policies with standardized benefit packages, 4. the state requires carriers to use pure community rating in setting premiums for the standardized policies, and 5. the authorizing legislation called for oversight by a board, which runs the program independently of the New Jersey Department of Banking and Insurance.