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ACA Faces Dropout Hurdles

Customers continue to drop coverage as exchanges look toward open enrollment

About 9.9 million people were enrolled in the state and federal health insurance exchanges at the end of June — a 15% drop from the 11.7 million who were enrolled at the end of February. As November 1 and the new sign-up period draw near, an added challenge will be keeping customers in the marketplace.

As The New York Times reports, there is no comprehensive data on why people drop or lose their marketplace coverage. However, enrollment counselors, health care providers, and consumers say cost is a factor. In some cases, people lost jobs or their income dropped after they enrolled. Other people signed up for coverage only to decide later that they could not afford it. Still others dropped their insurance after their federal subsidies — intended to help pay premiums — were reduced or eliminated because the government could not verify their incomes or concluded that they were earning more than they had reported on their applications.

The cost of marketplace coverage may be particularly challenging for some in 20 states that have not expanded Medicaid to provide largely free health care for people earning up to 138% of the poverty level. Many of these people can receive federal subsidies to help pay for private plans, but the subsidies do not always help enough.

Experts also point to another factor behind dropping or losing coverage: confusion. Some who signed up for coverage this year lost it within months because they did not understand what information they had to supply or even that they were required to make monthly payments, according to counselors who help people enroll in marketplace plans. In many cases, these individuals may have simply failed to provide a Social Security number on the application and did not respond to follow-up requests for it.

About 423,000 people in the 37 states that use the federal marketplace lost their 2015 coverage by June 30 because they had not provided sufficient documentation of their citizenship or immigration status, according to the Centers for Medicare and Medicaid Services. And for about 967,000 households in those states, their premium subsidies — and for some, a separate category of subsidies that help cover their copayments and deductibles — were recalculated because of “income inconsistencies.”

“This market is always going to be a temporary way station for some people until they get a job with health benefits,” said Larry Levitt, a senior vice president of the Kaiser Family Foundation, a nonpartisan health research organization. “Where I would get worried is if there starts to be evidence that people are dropping out because their insurance is becoming unaffordable, or they just don’t feel it offers them good value.”

Source: The New York Times, October 11, 2015.

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