With all the news about insurers canceling health plans due to the Affordable Care Act, including in the BDN, a national health consumer organization is calling for a little perspective.
First, let’s revisit the population that’s caught up in all this controversy, fueled by President Obama’s remarks that those who liked their health plans could keep them. These cancellations affect people who buy their own health insurance, rather than get coverage the way most of us do, through work or government programs like Medicaid and Medicare. It’s a small portion of the population, about 5.7 percent or 15.2 million people, according to a study released Thursday by Families USA. (That figure accounts specifically for people under 65, the age to qualify for Medicare and not have to worry about buying your own insurance. All of the study’s figures I cite here refer to these “nonelderly” people).
The study reports that in Maine, about 56,000 people under age 65 are covered by this insurance, called private “individual” or “nongroup” insurance. That’s 5.1 percent of the state’s population.
Nationally, almost three-quarters of these 15 million Americans who buy their own health insurance have family incomes that will make them eligible for substantial subsidies or for Medicaid under the Affordable Care Act, the study found. In other words, they earn less than four times the federal poverty level, or approximately $46,000 in annual income for an individual or $94,200 for a family of four. A tiny fraction, less than one percent of them, are at risk of losing their coverage and paying more, the study says.
The numbers also hold true in Maine. Three-quarters of those who currently buy their own coverage, or 40,000 people, can expect to qualify for subsidies or Medicaid, according to the study. Just half a percent face losing coverage and paying more.
While receiving a notice that your health insurance has been cancelled can be frightening, Families USA hopes the study will clarify for the public and the media that the overwhelming majority of people receiving cancellation notices will get better coverage and pay lower premiums under the ACA.
The organization’s executive director, Ron Pollack, also noted in a press call that the number of people who will be adversely affected “is a tiny fraction of the 65 million non-elderly people with pre-existing conditions who will gain new protections through the Affordable Care Act. It is also a small fraction of the tens of millions of uninsured Americans who can also get help through new health coverage.”
Many people who have coverage through work or the government aren’t aware of the challenges of buying affordable, comprehensive health coverage on your own. I certainly wasn’t before I started reporting on health care. The premiums can jump dramatically, out-of-pocket costs and deductibles can be high, and you may face gaps in benefits. Insurers could turn you down or charge you more if you had health problems (though for the most part that practice was already banned in Maine’s individual market before the ACA). Largely because of those drawbacks, only about a third of people with individual coverage keep it for more than a year, Families USA found.
Still, I’ve spoken to a few people who were happy with their plans, don’t want to lose them, and face paying more in premiums. I expect to hear soon from others who qualify for subsidies and are thrilled to ditch their plans for better and cheaper coverage.
The trouble is, many don’t know yet if they’ll get financial help, given the technical problems with HealthCare.gov.
A few parting notes. First, how does Maine refusing to expand Medicaid, or MaineCare, tie into all this? Pollack explained that in general, very few of the people who will lose out in states that don’t expand Medicaid have individual insurance today because they can’t afford it. So a state’s decision not to expand Medicaid doesn’t significantly affect Families USA’s calculations about those poised to lose their existing coverage.
Second, the state insurance bureau says about 32,000 Mainers are currently covered by individual insurance, quite a difference from the 56,000 Families USA cites. I asked Families USA about the discrepancy but haven’t heard back yet. My guess is that their number is based on slightly older data, while the state’s info is fresh, from September of this year. Update: The study’s author, Kathleen Stoll, writes in an email that the discrepancy could arise from the fact their some of their baseline data is from a survey in March that asked people to describe the coverage they had the previous year. The state insurance bureau’s numbers are more of a snapshot in time.
Third, Families USA did not collect data on the number of consumers who actually received cancellation notices. They looked at all people with private individual health coverage. Pollack said that makes their numbers conservative, since not everyone with individual insurance will see their plan cancelled. Also, in tabulating who’s at risk of losing coverage, the organization looked only at people who had their policies for more than a year (those who wouldn’t have dropped their coverage anyway).
Lastly, Families USA is a nonprofit that supports the Affordable Care Act. Their report is based on data from the Urban Institute, the Kaiser Commission on Medicaid and the Uninsured, and the State Health Access Data Assistance Center.