Most people who bought insurance under the Affordable Care Act were uninsured

Posted June 20, 2014, at 5:36 a.m.

About six in 10 people who bought health insurance through Affordable Care Act exchanges were previously uninsured, according to a new survey that provides one of the first comprehensive looks at the insurance landscape after the health-care law’s first open enrollment period.

Although a large majority of people who purchased exchange coverage received financial help from the federal government to pay their premiums, affordability remains a major concern for people buying their own coverage, according to the Kaiser Family Foundation survey.

The findings are an indication of the impact of the health law’s coverage expansion on the individual health insurance market after taking effect in January. The Obama administration hasn’t reported how many of the 8 million people selecting coverage through the exchanges were previously uninsured, and almost every state running its own insurance marketplace is still studying this question. Other surveys have shown that the uninsured rate has fallen in the past few months, although the exchanges’ role in driving down that rate has been unclear.

The Kaiser findings are at odds with other surveys that found most people who bought exchange coverage already had insurance. A Rand Corp. survey in April found that one-third of exchange enrollees were previously uninsured. McKinsey & Co. last month reported 26 percent of people purchasing plans in the individual market, on and off the exchange, were previously uninsured.

Kaiser Senior Vice President Larry Levitt said other surveys underestimated the previously uninsured population by asking people about their insurance status over the past year, which doesn’t account for how often people shift in and out of the individual insurance market. For example, a person who was uninsured when buying an exchange health plan may have reported previous coverage if he or she had insurance at another point during the year.

Fifty-seven percent of people purchasing exchange coverage said they were previously uninsured, with most (71 percent) reporting that they didn’t have coverage for at least the past two years. Just 16 percent said they bought an exchange plan to replace individual coverage.

People in exchange plans make up about 48 percent of individual health insurance market, according to Kaiser. An additional 16 percent purchased health plans outside the exchange, most likely through an insurer or broker.

About three in 10 people who buy their own insurance are enrolled in plans that don’t comply with the law’s coverage requirements. This population includes people whose plans were granted grandfathered status, were renewed early or received a temporary extension under a transitional White House policy allowing people to keep their plans.

Affordability remains a major concern for people in the individual market. About 14 percent of those in new health plans — which includes exchange and non-exchange coverage — said it is “very difficult” to pay their monthly premium, while 29 percent said it is “somewhat difficult.”

Kaiser’s findings suggest that many don’t realize they’re receiving federal assistance to buy insurance. Just 46 percent of people with exchange coverage reported receiving monthly help from the government — much less than the 85 percent who actually received premium subsidies, according to the Department of Health and Human Services. On average, federal subsidies had reduced premium payments by 76 percent for people enrolled in exchange plans, HHS reported Wednesday.

The 13 percent of people who said they replaced an existing health plan with a new ACA-compliant plan, either inside or outside the exchanges, were three times as likely to say they were negatively affected by the health-care law. About half of these people received cancellation notices, and those who replaced existing coverage were more likely than previously uninsured people to say the value of their new plan is “fair” or “poor” (51 percent vs. 32 percent).

People enrolled in exchange plans were more likely to say they benefited from the ACA (54 percent) compared with previously insured people who switched into new coverage (41 percent). People who bought their own individual plan not through an exchange, where federal subsidies aren’t available, were more than twice as likely to say they were negatively affected by the law.

Kaiser polled 742 adults between the ages of 18 and 64 who said they bought their own coverage. The telephone survey was conducted between April 3 and May 11, just after the ACA’s first open enrollment period ended.

 

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