June 17th, 2014
In October of 2013 President Obama faced a political firestorm over the cancellation of millions of individual insurance plans — plans not compliant with the requirements of the Affordable Care Act (ACA). The Associated Press (AP) estimated that 4.8 million persons with non-group coverage had their policies cancelled, and this estimate was widely quoted in the media and the Congress. In headline stories, the media also reported that policyholders of the canceled plans were now offered alternative plans, often at premiums more than double of their current plans.
When the controversy over cancelled policies broke, no surveys were available to estimate the number and the cost of cancelled policies. In October, HealthCare.gov and many state-based marketplace websites were virtually non-functional, so assessing comparative cost and benefits of cancelled and Marketplace plans largely was precluded. In this post I highlight information from subsequent surveys and analyses conducted in late 2013 and 2014 that measure the number of cancelled plans and the comparative cost of coverage in the pre-ACA and post ACA-Markets. The next two paragraphs summarize findings.
Recent survey data indicates the number of persons affected by cancelled policies was about 1.9 million persons, less than the often cited 4.8 million estimate. When persons with group health insurance are included in the denominator, these cancellations affected less than one percent of persons holding comprehensive private insurance. The number of people with non-group policies who became uninsured following last October’s cancellation of policies is similar to what occurs in the normal churn of the non-group market.Read the rest of this entry »