A Proper Perspective on Health Coverage Terminations

Thousands of Americans, undeterred by computer glitches, have signed up for affordable, quality health insurance through HealthCare.gov and the state exchange websites. And thanks to the Affordable Care Act (ACA), people with pre-existing conditions, will no longer be denied the health care they so desperately need. The administration is also working with some of the country’s leading tech experts to improve HealthCare.gov so that even more people can sign up.

Despite these successes, there has been an abundance of media attention on the recent terminations of individual health insurance policies, and to some extent, these concerns have been blown out of proportion.  Like any other challenge made to a major piece of legislation, it’s critical to keep the debate in proper perspective. A new report by Families USA, entitle “How Does the Affordable Care Act Affect People Who Buy Health Insurance in the IndividualMarket?,” sheds light on the recent health coverage terminations.

Cancellations are occurring in the private, individual (non-group) market.  Only 5 percent of Americans get coverage in this market, and the majority of them are in this volatile market for less than a year. Slightly more than one-third of people with individual coverage have retained it for more than one year. The median duration in such plan coverage is eight months. It’s also important to remember terminated plans don’t comply with the ACA’s protections.

For the 5 percent of Americans in the individual market, more than two-thirds (71 percent) are eligible for substantial premium subsidies or expanded Medicaid, according to a recent Families USA report. This is good news for those who receive cancellation notices, they’ll potentially find a better plan, at a better price, at HealthCare.gov and state marketplace websites.

Although president Obama was right to express his concern about—and to propose interim corrective action for—the people at risk of losing health coverage due to the ACA, it’s important to keep perspective about the small portion of the population that might be adversely affected. That number is a tiny fraction of the 65 million non-elderly people with pre-existing health conditions, who will gain new protections through the affordable care act. It’s also a small fraction of the tens of millions of uninsured Americans, who can get help through new health coverage assistance. This perspective should be kept in mind as efforts continue to be made to mitigate any harm arising from plan terminations.

The overwhelming majority of people with private individual insurance today will soon be able to receive better coverage and pay lower premiums due to the Affordable Care Act. As a result, their improved health coverage will become much more affordable.



By Jon-Michael Basile