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New Study Finds That 51 Percent Of Americans With Individual Health Insurance Will Improve Their Coverage In 2014 Through The Health Exchanges

Press Release

Bethesda, MD—More than 11 million Americans below the age of 65 are now covered by private individual health insurance plans. A new study, released today by Health Affairs as a Web First, measured the actuarial value of a sampling of 2010 health plans (the percentage of medical bills an insurance company pays) for both group and individual policies, and found that the majority of individual plans fell below the minimum standards and benefits required by the Affordable Care Act of 2010.

The Affordable Care Act sets up four tiers of health plans for consumers to purchase, ranging from “platinum” (90 percent actuarial value or better) to “bronze” (60–69 percent). According to authors, the average actuarial value for group health insurance plans was 83 percent—safely in the “gold” range. For individual insurance values, they found that the 51 percent were enrolled in plans with a value of less than 60 percent, the bottom of the “bronze” range. These “tin” plans had benefits and values below the minimum requirements established under the Affordable Care Act for future state-based exchanges.

The authors of More Than Half Of Individual Health Plans Offer Coverage That Falls Short Of What Can Be Sold Through Exchanges As Of 2014, used data from the Kaiser Family Foundation/Health Research and Educational Trust 2010 Employer Health Benefit Survey for its group plan analysis. For individual plan data, the authors sampled enrollment data in five states through interviews with marketing managers of the different carriers. The source of data on plan characteristics, such as deductibles and copayments, included public websites, such as eHealthInsurance. For each plan in the individual and group database, the researchers conducted simulated bill paying to determine the amount of the bill paid by the plan and the beneficiary. The average out-of-pocket expenses were $1,765 for those enrolled in group plans, compared to $4,127 with individual plans. Very sick patients—those in the top 1 percent of medical spending—paid $3,763 in platinum plans, compared to $27,435 for those in the tin individual plans. “Individual insurance design does not meet exchange standards for the majority of covered lives,” conclude the authors. “To sell to ten million new buyers on the exchanges, insurers will need to redesign benefit packages. The individual insurance market in a post–health reform world will sharply contrast with the market of past decades.”

The authors of More Than Half Of Individual Health Plans Offer Coverage That Falls Short Of What Can Be Sold Through Exchanges As Of 2014, used data from the Kaiser Family Foundation/Health Research and Educational Trust 2010 Employer Health Benefit Survey for its group plan analysis. 

For individual plan data, the authors sampled enrollment data in five states through interviews with marketing managers of the different carriers. The source of data on plan characteristics, such as deductibles and copayments, included public websites, such as eHealthInsurance. For each plan in the individual and group database, the researchers conducted simulated bill paying to determine the amount of the bill paid by the plan and the beneficiary. The average out-of-pocket expenses were $1,765 for those enrolled in group plans, compared to $4,127 with individual plans. Very sick patients—those in the top 1 percent of medical spending—paid $3,763 in platinum plans, compared to $27,435 for those in the tin individual plans. “Individual insurance design does not meet exchange standards for the majority of covered lives,” conclude the authors. “To sell to ten million new buyers on the exchanges, insurers will need to redesign benefit packages. The individual insurance market in a post–health reform world will sharply contrast with the market of past decades.”


About the  Authors

John R. GabelJeremy D. PickreignHeidi Whitmore, and Ethan Levy-Forsythe are affiliated with the Health Care Research Department at the social science research organization NORC at the University of Chicago, in Bethesda, Maryland; Ryan Lore, Roland D. McDevitt, and Michael Slover are with Towers Watson, in Arlington, Virginia.


About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and published twice monthly at www.healthaffairs.org. The full text of each Health Affairs Web First paper is available free of charge to all website visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from the Commonwealth Fund. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download our podcasts, including monthly Narrative Matters essays, on iTunes. Tap into Health Affairs content with the new iPad app.


About NORC at the University of Chicago

NORC at the University of Chicago conducts research and analysis that decision-makers trust. As a nonpartisan research organization and a pioneer in measuring and understanding the world, we have studied almost every aspect of the human experience and every major news event for more than eight decades. Today, we partner with government, corporate, and nonprofit clients around the world to provide the objectivity and expertise necessary to inform the critical decisions facing society.

www.norc.org

Contact: For more information, please contact Eric Young at NORC at young-eric@norc.org or (703) 217-6814 (cell).


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