Friday, June 12, 2015

Is the Affordable Care Act providing the coverage Congress intended?

Reuters reports, "Despite Obamacare, gap health insurance market explodes".  Find the article here:

Despite the promise of coverage through the Affordable Care Act (ACA), the number of people applying for non-compliant, short-term health insurance policies was up more than 100 percent in 2014, according to new data available from companies who broker these policies.

This type of health insurance, short-term, low-cost coverage for major medical events like hospital stays, with high deductibles and out-of-pocket costs, is the kind that the ACA was supposed to upgrade. These plans are also subject to denial if applicants have pre-existing conditions. For example, they do not offer coverage for preventive care or maternity care.

The Reuters report also notes that the ACA does not count these gap plans as qualifying health insurance, so people who have them are subject to penalties for being uninsured.

Accounting for much of the jump are individuals who somehow missed the ACA open enrollment period. More than 11.7 million consumers signed up for ACA coverage through February of this year; however, the Reuters article cites a health insurance broker for these gap policies to point out that people missed the ACA enrollment "mostly because of poor communication between consumers, the government and insurance companies". Those who missed the opportunity to sign up and did not have a qualifying event now have to wait until the next open enrollment period to try again, so they need an insurance plan to bridge the gap.

The same brokers report new signups from retirees looking for low-cost plans to tide them over until Medicare kicks in at 65: Purchasing insurance as a 50-year-old on can be expensive.  "There are people who have looked at the prices and it makes more sense to buy short term."

But the largest constituency of gap policies are is young, healthy people seeking low-cost catastrophic coverage. Those aged 18 to 34 account for 57 percent of one broker's buyers. A typical policy could cost around $100 a month, depending on the state of residency and the features of the plan.

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