Tuesday, June 19, 2018

Dine and Dash Healthcare: Approximately Half of PPACA Enrollees Dropped coverage by the End of Their Plan Year - Many After One Month

From BenefitsPro
A new analysis raises concerns about the survival of the Affordable Care Act marketplace due to people strategically enrolling and dropping out of ACA plans.  A paper by Stanford University researchers finds evidence that people are buying plans to address a health concern or discretionary care and then ditching the plan. 
“Our analysis shows that many consumers are strategically signing up for insurance to help defray the costs of non-chronic, potentially discretionary, health care needs and then dropping coverage once they have satisfied these needs,” says Rebecca Diamond, a Stanford professor of economics. 
The paper examined over 100,000 households that enrolled in ACA plans during the first year of the ACA marketplace, in 2014. It found that a large percentage of enrollees of all income levels stopped paying premiums during that year. In California, according to their research, in 2014 and 2015, approximately half of enrollees had dropped coverage by the end of the year, with many dropping after just one month. 
Those with the lowest incomes were most likely to drop coverage. 
“Among 2014 open enrollment households with less than $20K of income, approximately 35 percent drop coverage by July 2014,” the authors write. “The rates of drop-out among high income households were similarly high, around 30 percent. By the end of 2014, approximately 50 percent of lower income households stop paying their premiums. The drop-out rates of the highest income households are only slightly lower.” ...
The Obama administration also sought to discourage people from going without insurance or dropping their plans by raising the tax penalty for being uninsured. Those efforts, however, were undone at the end of last year, when President Trump signed tax legislation that repealed the individual insurance mandate entirely. ...