People changing individual health insurance plans is nothing new

NE_Appleseed_Icons_AffordableCareAct-128Opponents of the Affordable Care Act have tried to cast doubt on the effectiveness of the law despite more than 8 million Americans – and 43,000 Nebraskans – signing up for private coverage through the Health Insurance Marketplace during the first ACA enrollment period.

One of their common complaints is that many Americans with nongroup coverage not provided by their employers had their old plans cancelled by their insurance companies.

However, a new study by Health Affairs gives important context to these cancellations. When you examine the historical trends, it becomes clear the nongroup health insurance market has been volatile well before the Affordable Care Act.

Frequent disruptions in coverage have long been common before the ACA, and the effects of the recent cancellations are not out of the ordinary:

  • Every year more than 6 million Americans with nongroup coverage moved out of their policies.
  • Only 42 percent of people who had nongroup coverage at the start of the study remained with the same plan after 12 months.
  • Of the people who did not keep their nongroup coverage, 80 percent of them found new insurance within a year, most often by gaining insurance via an employer.

The changes mostly affected younger people. Only 21 percent of Americans age 19-35 in the study kept non-group insurance continuously for two years.

So, people moving in and out of the private insurance market, or from one individual plan to another has been happening for a long time, certainly before the ACA.

But the big benefit of the ACA is providing more comprehensive coverage in the individual market with premium assistance available to make policies more affordable. In the first enrollment period, 87 percent of Nebraskans received a subsidy to help pay premiums.

Thanks to the ACA, if people need to go on the nongroup market they can buy higher-quality coverage, removing some of the uncertainty that has long been part of the U.S. health insurance system.

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