By the way, about those "OMG!! 5M CANCELLED POLICIES!!!"... (UPDATED)
2018 MIDTERM ELECTION
Time: D H M S
So, a lot of people, including myself, have talked quite a bit about the people who had their pre-2014 insurance policies cancelled due to them not being compliant with one or more of the requirements of the Patient Protection & Affordable Care Act (one of the few times I've used the full name, I might add). And yes, those people absolutely do exist; I know, because (as I've noted many times before), I was one of them. My wife and I received one of those "scary" cancellation notices last fall (nothing scary about it...just a simple note saying, "Your current policy isn't compliant with the law, so it'll end as of 12/31/13...we invite you to replace it with a new policy which is compliant with the law."
Nothing scary about it. In fact, I was expecting it, because I happened to know that our prior policy didn't include stuff like mental health coverage and so on. To be frank, I'm not sure why anyone was so shocked about this; insurance companies drop one plan and replace it with another all the time, just like no one expects Apple to keep selling the same iPhone model for eternity (or, if you want a "subscription service" equivalent, I don't see AOL still offering $19.99/month 56K dial-up to new subscribers anymore, do you?)
I mean yes, President Obama did kind of screw up by promising that "if you like your plan you can keep it". It was an impossible promise to keep--what if an insurance company happens to, you know, go out of business or get bought out? You can't "keep your plan" if the company selling it doesn't exist any longer (again, I don't see a lot of CompuServe or Prodigy subscribers these days).
For that matter, I never thought of a healthcare plan as something that anyone actually "liked". I like lasagna. I like movies. I like Jack Chalker novels. I don't "like" my health insurance plan. I may not mind it, or I may be satisfied that the cost is reasonable, the coverage is adequate and the customer service is efficient...but it's just not something that I consider "liking". Maybe that's just me.
But I digress.
Yes, these people do exist (at least 3 of them here in Michigan if you include my son). However, how many are there nationally?
Well, the number claimed has ranged from as low as 4.7 million to as high as an outlandish 17 million. Most of the sources I've read (even the right-wing, anti-ACA ones) seem to have settled on anywhere from 4.8 - 5.0 million, give or take. Until now, I've been as guilty as anyone of accepting these at face value.
Of course, there's also the fact that the CBO estimates that around 1.5 million of these people ended up taking up the "grandfathered plan" offer that the Obama Administration/HHS Dept. offered in response to the outcry over the cancellations. Until now, I've been willing to accept the higher cancelled estimate (5.0M), and have also been willing to only put the "grandfathered" number at around 1.3M, for a net "loss" of 3.7 million.
Now, of those remaining 3.7M people, I've assumed that the vast majority of them simply did what my wife and I did--they replaced their existing plans with new ones, either via one of the exchanges or directly through their insurance company.
HOWEVER, there are three recent articles which are now making me heavily question just how many of these "OMG!! 5M CANCELLED!!" really were cancelled in the first place. Two of them from last month; the third one is from just a week ago.
First up is this, from HealthAffairs.org, which references an Urban Institute study which found that only 2.6 million people actually had their policies cancelled specifically due to ACA noncompliance:
Thus, the extent of policy cancellations due to non-ACA-compliance is largely unknown, and the extent of the disruption is hard to assess, even as the Obama administration considers allowing individuals to keep non-ACA-compliant plans for up to three years.
To address this gap, in December 2013, the Health Reform Monitoring Survey (HRMS) asked a sample of adults (age 18–64) the following question: “Did you receive a notice in the past few months from a health insurance company saying that your policy is cancelled or will no longer be offered at the end of 2013?” These survey data are self-reports and thus likely measured with some error. (For information on HRMS methodology, including sample design and response rates, please see HRMS FAQs.)
The findings from HRMS show that nearly one in five (18.6 percent) of those with nongrouphealth insurance at the time of the survey report the plan they had in 2013 will no longer be offered to them because it did not meet new coverage requirements. Estimates from the NHIS indicate that approximately 14 million people had non-group coverage at a point in time. Identifying the number of people enrolled in non-group insurance is challenging. Estimates in Abraham et al. (2013) ranged from 9.55 million in the Medical Expenditure Panel Survey to 25.3 million in the American Community Survey. We use the NHIS estimate since it corresponds with more recent estimates based on new NAIC enrollment data reported in the Supplemental Health Care Exhibit (SHCE).
Using this estimate, our findings imply that roughly 2.6 million people would have reported that their plan would no longer be offered due to noncompliance with the ACA. Another 6 percent reported that their plan was cancelled for other reasons, and 75.4 percent reported that they did not receive a notice of cancellation (figure 1).
Next, we have this article from the LA Times, which quotes the Urban Institute study but also follows up with a passage regarding Washington State specifically:
The myth of the tide of cancellations has opened the door to mischief at the state level. In Washington state, Republicans are offering a bill that addresses the so-called cancellation crisis by allowing policies from other states to be sold in Washington without oversight by the state insurance commissioner.
That's just a formula for a race to the bottom and abuse of the consumer, says the commissioner, Mike Kreidler, who adds that it's based on a sizable overestimate of the number and cause of cancellations in the state. The individual policy market has been shrinking for years, even before the ACA, Kreidler says, with most coverage being dropped because customers found it too expensive for the skimpy benefits.
Finally, here's the kicker: A PolitiFact check of a recent attack ad by Rick Scott's PAC against Charlie Crist from just a week ago, specific to Florida:
There are a lot of claims about Obamacare in the ad, but we wanted to focus on one that has received considerable media attention in Florida: Were 300,000 health plans canceled?
The ad flashed a picture of an October front page article in the St. Augustine Record about 300,000 plans from Florida’s version of Blue Cross Blue Shield, known as Florida Blue.
In 2013, Florida Blue started sending letters to about 300,000 members explaining that the Affordable Care Act requires plans to provide 10 categories of essential benefits. Some Florida Blue plans didn’t include those services, so those plans would be closed. But that didn’t mean those 300,000 members were stranded without insurance.
...There’s more to the 300,000 number than the ad suggests.
“It is important to note that the ‘300,000’ was a number that was being used when describing how many Florida Blue members could receive a notice that their policies would not be compliant with ACA requirements throughout all of 2014, if no extension was provided to these plans,” spokesman Paul Kluding told PolitiFact Florida in an email. “In actuality, only 40,000 letters were mailed to members with Jan. 1, 2014, effective dates. Subsequent notices were sent to these members notifying them that their existing plans would remain active and unchanged through 2014.”
In November, Florida Blue announced it was giving policyholders another year to keep their coverage at the request of President Barack Obama.
“To date, most of the members in our pre-ACA plans have kept their plans,” Kluding said.
Former state Sen. Steve Geller, an informal adviser to Crist’s campaign, pointed to that decision by Obama and said, “few if any Floridians will lose their current health insurance policies.”
Well whaddya know? Apparently, "could have" been cancelled does not mean "actually WAS cancelled". Imagine that.
So, the question now is...if only 13% of Florida's share of the "OMG!! 5M CANCELLED!!" number actually was true, what does that say about the other 4.7 million policies which might have received these notices?
I think it's safe to say at this point that we can cut the total down to at most the 2.6 million figure that the Urban Institute came up with....and even that may be being generous.
UPDATED 4/09: Glenn Kessler notes that the Florida experience was repeated in Kentucky, where only a fraction of either the "280K cancelled" claimed by Mitch McConnell actually were cancelled at all:
Ronda Sloan, a spokeswoman for the department, said there was some confusion in the reporting about what the November statement meant, in that the 280,000 figure “was simply the number of people in the individual and small-group markets at that time who potentially could have received a letter saying their health insurance policies were being discontinued” because benefits were changing.”
In other words, when the state made the announcement, it did not know how many plans might actually comply with the law; it just described the size of the individual and small-group markets.
The statement also stressed that “discontinuation notices” would be mailed when policies were up for renewal. We have no idea what the flow would be, but just taking a simple average over 12 months yields 11,000 individual policies a month. That adds up to only 55,000 individual policies since November, yet McConnell assumed that all of the notices had been mailed and received.
So let's see here. Only 13% of the number claimed by the GOP in Florida. Only (at most) 20% of the number claimed by McConnell (or 33% if you use the lower figure claimed by other GOP pundits).
It's starting to sound to me like the actual number of "OMG!! 5M CANCELLED!!" may be more like 1-2 million at most...and again, just about all of those appear to have done exactly what I did: Switched over to an ACA-compliant plan, with all the protections included (no recission, no maximum cap on coverage costs, strict maximum cap on out-of-pocket costs, etc), either on or off the exchanges.