In which "OMG!! GAZILLIONS OF POLICIES CANCELLED!!" turns out to be...not so much.
2018 MIDTERM ELECTION
Time: D H M S
A few weeks ago, I posted "Get ready for the "OMG!! GAZILLIONS OF POLICIES CANCELLED!!" Freakout" in which I pointed out that while yes, some policies which aren't in compliance with ACA requirements will indeed be discontinued this year, the odds are that the actual number will end up being far fewer than the GOP attacks will claim.
Well, right on schedule, here comes the freakout, and as I expected, the actual number of policies cancelled looks like it'll be missing a few zeroes from the attack headlines:
Thousands of Americans will see their health plans cancelled before the November elections in a development that could boost critics of ObamaCare.
The Morning Consult, a Washington-based policy publication, reported that nearly 50,000 people will lose their current health coverage in the coming weeks.
The figure encompasses cancellations announced by insurance departments and providers in Kentucky, Alaska, Tennessee, New Mexico, North Carolina, Maine and Colorado.
Take another look at that number: 50,000 total...from 7 states, with a collective population of nearly 30 million people.
Now, compare this against last years claims that 5 million, 6 million or eleventybillion policies were being cancelled...and the reality in, for example, Kentucky:
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.
Yup. Mitch McConnell--the same guy who wants to cancel policies for over a half a million people in his state alone, and 26 million nationally, overstated the number of non-compliant policies which were discontinued due to the ACA by more than 5x.
Does that mean that only 50,000 will have to replace their policies with new ones this fall? Of course not; using a strict percent-of-population ratio (30 million vs. 316 million) suggests that it could be up to half a million nationally. However, it's important to remember that while 30 states granted the one-year "grandfather" extension of noncompliant plans, 15 other states (plus DC) did not...including California and New York, among others (there are 5 states which I'm not sure about). In other words, the band-aid was already yanked off, so to speak, for 1/3 of the country, which suggests that the actual number may end up being perhaps 360,000 altogether.
Now, to be fair, a strict percent-of-population extrapolation is probably not accurate; some states, like Virginia, for instance, have an unusual situation which could result in up to 240K policies having to be replaced in that state alone. However, even there, the number is likely way overestimated; it could be as low as 101K (which is admittedly still a lot of people, but far fewer than 240K). The point is to take the numbers being thrown around with a huge grain of salt.
Now, that obviously won't make those people whose policies are cancelled feel any better, but a good chunk of them should already be aware that this was coming (since they presumably were informed that their policy had been given a 1-year extension last November), so I suspect that the actual number of people getting the vapors over the Scary Letter From Their Insurance Company will be far less dramatic than the GOP will make it out to be.
Finally, it's also important to stress two other points:
1. Insurance companies were discontinuing their policies for a variety of reasons (usually profit-based) all the time BEFORE the ACA. They've had 4 years to bring their policies into compliance with the law, and many chose not to do so. They just get to blame "Obamacare" in this instance.
2. Just because someone's current policy is cancelled doesn't mean that they're suddenly unable to get insurance. All they have to do is switch from their NON-compliant policy to a COMPLIANT policy. Annoying? Sure. Devastating? Hardly.
I should know, after all: I was one of them last year...and in my case, the new policy will end up costing us several thousand dollars less even though the actual premiums are higher.