California: 78,000 people still enrolled in grandfathered plans

I have a different California-specific post coming later this afternoon, but I stumbled across a mildly interesting bit of data and figured this would be a good time to share it while I wait to be able to post that one.

As you may recall, while the ACA required that most individual market major medical healthcare policies sold have to comply with full ACA regulations, there were some exceptions to this. The biggest exception made was for major medical plans which had been continuously enrolled in since before the ACA was signed into law in March 2010.

These plans were grandfathered in, and so are appropriately called "Grandfathered Plans", and applied to perhaps 5 million people or so back in 2014, when ACA-compliance became mandatory for newly-sold policies.

There were also, of course, another 5-6 million people who had enrolled in policies between 2010 - 2013; those were originally supposed to be terminated, but after the "You Can Keep It" brouhaha in November 2013, the Obama Administration allowed each state to decide whether or not they'd allow insurance carriers to keep offering these policies, which are known as "Grandmothered" or "Transitional" plans. Some states did, some didn't.

As the years have gone by, enrollment numbers for both Grandfathered (GF) and Transitional (TR) have gradually dwindled, of course, as people have either moved off of them onto ACA-compliant plans, aged into Medicare, moved onto employer-sponsored plans, Medicaid or other types of coverage, or passed away.

GF/TR enrollments are notoriously difficult to hunt down in many states, but the Kaiser Family Foundation pegged it at around 1.1 million (both types combined) as of the first quarter of 2019, which sounds about right to me.

As I noted, while around 2/3 of the states are still allowing both GF & TR plans, 1/3 are only allowing GF plans as of today...including the largest state, California.

As it happens, California is also one of the few states which make it fairly easy to keep track of enrollments in those policies, via their interactive, searchable rate filing database.

With that in mind, as far as I can tell, around 144,000 people are still enrolled in Grandfathered individual market policies as of today...or at least were at some point in 2019, anyway. When I ran a search for policies with an effective date of any time from January 1, 2019 through the end of 2020, I get

  • AXA Equitable: 48 covered lives as of August 2019
    • (they asked for a whopping 20% rate hike but were only approved for 6.5%)
  • Blue Shield of California: 23,592 covered lives for January 2020
    • (9.9% rate hike requested & approved)
  • Anthem Blue Cross: 54,825 covered lives for April 2020
    • (13.4% rate hike requested & approved)

Add them all up and that's 78,465 Californians still enrolled in Grandfathered individual market plans some six years later.

While this may sound like a lot of people, keep in mind how large California actually is...of the 5 million or so enrolled in GF plans in 2013, I'd guess a good 600,000 or more were in California, so the number has dropped by perhaps 88% by now.

In fact, two of the three carriers (Blue Shield and Anthem) also list their 2019 enrollment numbers for comparison...26,843 and 86,032 respectively. That's almost 113,000 people, and AXA's numbers are nominal, so CA's Grandfathered numbers have dropped by another 34,410 people within just the past year, or by 30% year over year. My guess is the total will drop off to zero within another year or two.

I'll also note that 78K / 1.1 million = around 7% of Kaiser's estimate of total GF/TR plans nationally. While California has over 12% of the total U.S. population, remember that the 1.1 million figure also includes Transitional plans, which California doesn't have, so 7% sounds pretty reasonable to me.