Affordable Care Act Plans Being Canceled by Patients

The Centers for Medicare & Medicaid Services (CMS) recently released 2 reports that discuss trends in health insurance enrollment, the Effectuated Enrollment report and the Health Insurance Exchanges Trends report.

The reports both show that after signing up for coverage on Affordable Care Act (ACA) marketplaces, many individuals have dropped the plans, according to a press release.

The 2017 Effectuated Enrollment report found that 10.3 million individuals paid their first month’s premium in February 2017. This was less than the projected number of effectuated enrollees for this year, according to the report.

However, the CMS previously found that 12.2 million individuals signed up for a 2017 plan, which means that approximately 1.9 million individuals dropped their coverage.

Historically, more than 1 million enrollees per year have dropped their coverage before the end of the plan year, according to the report.

The report also revealed that financial assistance has remained stable, with a 28% increase in the average amount of advance premium tax credits in 2017 compared with 2016.

The Health Insurance Exchanges Trends report examined trends among individuals who canceled their ACA coverage in 2017. The investigators specifically focused on affordability, financial assistance, and plan choice.

Since 2013, there has been a significant increase in premiums, with an average increase of 105% through 2017, according to the report. Many states have seen premiums at least double since 2013.

The CMS found that individuals who were more likely to terminate coverage were less likely to receive financial assistance compared with those who have maintained coverage.

Those who canceled their plan were also more likely to have higher premiums. On average, these individuals paid $209 per month compared with $150 for all consumers with active plans, according to the report.

Of individuals who canceled their coverage before their first premium, 46% said cost was the reason for cancellation. Approximately 20% cited premium increases as the reason for canceling their plan, while 17% canceled due to ineligibility for financial assistance, according to the CMS.

Of those who canceled their coverage after paying at least 1 month’s premium, 49% reported seeking other coverage. Nearly 60% of patients reported gaining employer-sponsored coverage, while 22% were eligible for Medicare.

Interestingly, a higher number of individuals who experienced an insurer withdrawal did not maintain their health coverage. Overall, 77% of individuals whose 2016 insurer sold plans maintained 2017 coverage, while only 70% of individuals whose 2016 insurer exited enrolled in coverage.

The CMS concluded that high premiums and ineligibility for financial assistance, in addition to insurer withdrawals led many individuals to cancel their coverage. These findings suggest that people who are responsible for paying more of their premium are affected by cost increases and likely to cancel their plans.

“Consumers are sending a clear message that cost and affordability are major factors in their decision to cancel or terminate coverage,” said Seema Verma, CMS administrator.