Survey of Non-Group Health Insurance Enrollees
Conclusion and Implications
The Affordable Care Act changes the non-group health insurance market substantially, requiring insurers to accept all applicants regardless of their health, standardizing coverage, creating new health insurance Exchanges to facilitate shopping for insurance, and providing income-based premium and cost-sharing subsidies. The Exchanges, along with expanded eligibility in Medicaid, are the primary mechanism for reducing the number of uninsured Americans under the ACA.
Currently, about two-thirds of non-group enrollees are in plans that meet all of the new rules (“ACA-compliant plans”), most of whom have purchased coverage through an Exchange. Three in ten remain in non-compliant plans, which includes those who were grandfathered under the ACA because they were purchased before the law went into effect, those who renewed policies last year or bought coverage that began before January 1, and those who have been able to keep their old policies for a period of time under a federal transition policy at the discretion of states. Over time, fewer people will remain in non-compliant plans as they lose or drop their coverage, and the only new plans available in the marketplace are those that comply with the ACA’s rules.
The new rules in the non-group market not only create new coverage opportunities for those who were previously uninsured, but they also mean changes for people who were buying their own coverage before the ACA took effect, in some cases creating disruption and in others better coverage at lower cost. The survey findings illustrate some of the real and perceived impacts of these changes on different groups.
For example, the survey finds that nearly six in ten of those now covered by Exchange plans were uninsured prior to signing up. The previously uninsured are one of the groups most likely to believe they have benefited from the ACA, and seven in ten of them say they would not have gotten coverage without the law. On the other side, people who were previously covered by non-group insurance and switched to an ACA-compliant plan (including those whose previous policies were cancelled because they didn’t meet the requirements of the health law and those who switched for other reasons) are one group that is more likely to feel they have been negatively affected by the law. However, in spite of reports last year about some people having plans cancelled and facing higher premiums, the survey finds that plan switchers are about as likely to report paying less for their new plan than their old one as to say they are paying more. This is likely due in part to the availability of tax credits for low- and moderate-income people who buy Marketplace coverage.
The survey also provides the first look at the health status of enrollees in ACA-compliant plans, which has implications for whether premiums this year will be adequate to cover the health expenses of enrollees and how much insurers may increase premiums for next year. While the majority of individuals in non-group plans report being in good health, those with ACA-compliant plans – which insurers rate as a single risk pool regardless of whether coverage was purchased on or off the Exchange – are more likely than those with non-compliant plans to report their health as “only fair” or “poor.” This suggests that people in new, ACA-compliant plans are somewhat sicker than those in the non-group market previously, some of whom have been able to retain their non-compliant coverage under transition policies. What this might mean for premiums in the non-group market is still uncertain, however, since many insurers anticipated a sicker-than-average mix of enrollees when they set their premiums for this year.
The survey’s findings about shopping and enrollment also have implications for future enrollment periods. While most of those who enrolled in coverage found it easy to compare plans, many spent significant time on the shopping process and half sought help with enrollment. This survey only looked at the experiences of those who successfully enrolled, and it’s likely that those who attempted to enroll but were unsuccessful encountered more problems with the process.
The non-group market will continue to undergo significant changes as people shift from non-compliant plans and more people enter the market in the years ahead. Though non-group enrollees represent a relatively modest share of the population, their experiences in the market have significant implications for whether the ACA is perceived as a success or not. This survey is the first in a series that the Foundation plans to conduct tracking the views and experiences of this important group.