Individual plan cancellations under ACA dropped in 2014

About 2.2 percent of the estimated 17.6 million Americans enrolled in individual insurance got word in 2014 that their plans were being canceled due to noncompliance with the Affordable Care Act, according to the Urban Institute. Another 9 percent of plans were canceled for reasons that were not clear to policyholders.

Even at 11.2 percent, that number represents a drop from the previous year. Plan cancellations hit nearly 20 percent of individual consumers in 2013, FierceHealthPayer previously reported.

The Urban Institute assessed data from a Health Reform Monitoring Survey sent to about 5,500 adults ages 18 to 64 at the end of 2014. The survey asked if the individuals received a letter indicating that their insurance would be canceled.

Among respondents with individual coverage, 2.2 percent received letters saying their coverage was being canceled because it did not meet the ACA's minimum coverage requirements. That amounted to about 400,000 individuals. Another 5.6 percent had plans canceled because of the coverage requirement or for another, unknown reason. Finally, 3.4 percent had plans canceled for an unknown reason.

The Urban Institute noted that the individual insurance is a volatile one. From 2008 to 2011, only 42 percent of enrollees retained coverage after 12 months, according to the report. As a result, "It may still be the case that insurers chose to cancel policies for business reasons, such as low enrollment, so some cancellations are to be expected for reasons other than ACA compliance. The nongroup cancellations caused by unknown reasons may be explained by such business decisions."

The Urban Institute attributed the drop in cancellations from 2013 to 2014 to the Obama administration's decision to grandfather plans that don't meet minimum coverage requirements. That said, the story may be different in 2015, as the Department of Health and Human Services announced last month that plans that don't offer hospital benefits no longer meet the ACA's minimum value requirement.

For more:
- here's the Urban Institute report

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