With the roll out of the Affordable Care Act, the fact that some people will lose their current insurance plan has been a major focus of media attention. It has been noted that only people in the individual market are getting cancellation letters because their plans don’t meet the 10 essential benefits requirement of the law. In total, this may affect just 5 percent of the population. The rest are covered by their employers or covered by Medicare or other assistance programs. Taking a closer look at how the ACA will affect people in the individual market sheds more light on the impact of these cancellation letters.
‘Of the 267 million non-elderly Americans (under age 65), just 15.2 million, or 5.7 percent, receive their coverage through the private, individual (non-group) market,’ according to Families USA. In Nevada, that number is 141,000 people, or about 6 percent of the population.
All in all, just .6 percent of non-elderly Americans may lose the individual coverage they otherwise would have retained and are not income-eligible for premium tax credit subsidies or Medicaid.
71 percent of the people who receive coverage through the private, individual market qualify for financial help in purchasing new, and better, insurance. Of the 15.2 million non-elderly Americans receiving coverage through the individual market, 7 in 10 have incomes lower than 400 percent of the Federal Poverty Level (FPL), and thus are eligible for financial help in purchasing a health plan through the exchange, or otherwise qualify for Medicaid at no cost. In Nevada, that’s 95,000 people.
It is typical of people on the individual market to enter insurance agreements that last only one year as it is. In fact, 64.5 percent of consumers keep their individual coverage for less than a year. It is often a bridge between employer coverage.
Among the 29% of those covered in the individual market who have incomes above 400 percent of FPL (and do not qualify for subsidies), only 35.5 percent of them (just 0.6 percent of all non-elderly Americans) keep their individual insurance for more than one year.
In reality, the cancellation of insurance plans has a very negligible impact on people with health coverage in the United States.