Wednesday, August 13, 2014

If you're dropping ACA coverage for any reason, I'd like to hear from you

[moving this forward per request for input at bottom...]

Charles Gaba, ACA signups tracker extraordinaire, dives into a scary-sounding claim about attrition among people who signed up for private health plans on ACA exchanges -- Aetna enrollments to drop 30%! -- and provides some clarity: attrition for private insurers generally is likely coming in at about 2.5% per month, as expected.

That attrition -- offset, to an unclear degree*, by off-season "special enrollment period signups -- is expected and normal. A Kaiser study found that only 62% of people who had individual market coverage in January 2010 still had in July 2010.  According to an older study by Mathematica Policy Research,  while, 5.3 percent of the non-elderly population had non-group [individual market] coverage  in any given month, only 2.1 percent held non-group coverage for the entire year, and 9.7 percent had non-group coverage at some point during the year.

Of the four people I know personally who obtained insurance on ACA exchanges, none will stay pat for more than fourteen months, and two will be off their plans within six months of signup. One is a woman recently divorced who found a job in July and was covered by her employer as of August 1; another is entering a graduate program that provides free (or at least premium-free) health insurance, effective Sept. 1. A third is switching from a high-deductible ACA plan to insurance provided by his wife's employer. Another qualified for Medicaid, then found a job (without insurance) in June, notified the authorities and was allowed to remain on Medicaid for a year, dated from the point when he reported change of status. If his income doesn't change, he'll qualify for a subsidized private plan with Cost Sharing Reduction when his Medicaid eligibility ends.

Those are four good outcomes for four middle class people. Individual market coverage is more often a stopgap than a long-term solution (though the ACA could make it more viable for longer terms for more people, as prices will be relatively stable for those who qualify for subsidies).   Doubtless there are some ACA enrollees who found the premiums too much to handle, or grew disillusioned with their plans when they realized how the deductibles and cost-sharing worked, or had other bad experiences.  Significant negative churn could also be problematic for insurers. The data will likely be murky for some time. But while waiting and watching, it's important to keep in mind that churn is good -- -- and likely to be higher in a strengthening job market.

Note to readers: if you signed up for ACA coverage of any kind in 2014 and expect to change plans or status in the foreseeable future, I would like to hear from you.  Please email via the "About me" tab on the right margin if you'd like to discuss your experience.

* Gaba forecasts a net drop in total enrollment of about 650,000 enrolled by Nov. 15. He expects off-season signups and those who enrolled and paid for some months and then dropped coverage to roughly cancel each other out, with those who enrolled but never paid making up the difference.  Overall, dropouts and never-paids would outnumber off-season signups by about 5-3 in this forecast.

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