Thursday, November 21, 2013

Few hardships among insurance cancellations

From what has been reported, you would think that 5 million Americans were risking bankruptcy due to the cancellations of their health insurance policies.

The actual truth is in a far different place.

First, these are not people who are part of employee groups, most of whom will not see major coverage changes. Instead, it is a small slice of the population — those who purchase health insurance individually — that has many valid alternatives.

The individual market covers 5.7 percent of the non-elderly population. The overwhelming majority of those people will obtain more affordable coverage under the health care law because they will be income-eligible for financial assistance to help pay for comprehensive insurance at a lower cost, according to a new report from Families USA.
“Individuals with household incomes that do not exceed four times the federal poverty level  — $94,200 for a family of four in 2013 — are income-eligible for either premium tax credit subsidies to buy coverage in the new health insurance marketplaces or Medicaid, which charges no premiums for most enrollees,” the report states.

Conversely, the number of people at risk of not keeping their current individual health insurance and who also will not be income-eligible for financial help to purchase new coverage under the Affordable Care Act is just 0.6 percent of the non-elderly population, the report states.  

And these are hardly hardship cases. For one thing, their income exceeds $94,200, meaning they are not destitute.

 And “according to peer-reviewed research, the average duration of individual-market coverage before the Affordable Care Act was very short. Its median duration was eight months, with individual plans often bridging periods of job-based coverage,” according to the report.

Also, “altogether, 64.5 percent of consumers with individual market insurance kept that insurance for a year or less — a result not affected by income.”

 Many of the 0.6 percent of Americans who have incomes too high for financial help and, without the ACA, would have kept their individual insurance for more than a year would prefer new coverage options, even without subsidies, the report states.

“A recent survey found that 45 percent of people with individual coverage described their insurance as ‘fair’ or ‘poor,’ compared to 18 percent or less for every other form of coverage, including Medicaid,” the report states.

Once again, the truth about Obamacare rests somewhere between the extremes of the heated debate between Republicans and Democrats.

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