Before open enrollment for the Affordable Care Act began last October, the nongroup market had frequent disruptions in coverage, concluded a new Health Affairs report. The study focused on three years prior to ACA implementation and found this particular market experienced high turnover even before the new healthcare law took effect.
The study aimed to determine the stability of nongroup coverage, identify which people were most likely to experience changes in the nongroup market and examine the ACA's long-term impact.
Last fall, news leaked that the Obama administration knew for at least three years that 40 percent to 67 percent of Americans in the individual market would lose their insurance, thanks to the ACA. As of March, almost 20 percent of consumers with individual plans said their insurance was no longer offered because it didn't meet ACA requirements.
However, "the effects of the recent cancellations are not necessarily out of the norm," report author Benjamin Sommers wrote. During the study period, 42 percent of individuals with nongroup coverage still had it after a year, while 80 percent who experienced coverage changes signed up for other insurance within a year, usually through an employer.
About 10.8 million people had nongroup coverage in 2012, and 6.2 million generally leave nongroup coverage each year. What's more, the results fall in line with previous studies that suggest nongroup markets can provide transitional coverage to people who are between jobs or who leave their coverage because they qualify for Medicaid.
Certain disruptions, like a rise of premiums, for instance, caused many young healthy adults to drop their coverage. For those between the ages of 19 and 35 years old, only 21 percent kept their nongroup coverage for two years. This not only highlights the high turnover rate for this age group, but also shows such changes occurred in the pre-ACA era.
Moreover, if individuals in the nongroup market hold coverage for only a short period of time, then the 2013 cancellations may have little long-term effects on coverage rates.
- here's the Health Affairs report (.pdf)