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27% of 2014 individual market enrollees previously lacked coverage, study says


By Paul Demko
Posted: March 7, 2014 - 1:15 pm ET
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Individuals who previously lacked insurance coverage represent just more than a quarter of those who have enrolled in 2014 coverage, according to a report by the McKinsey Center for U.S. Health System Reform.

Of more than 2,000 individuals surveyed in February who were eligible to enroll in commercial health plans, 48% indicated that they had signed up for coverage; 27% of all survey respondents who indicated that they had enrolled in coverage for 2014 also indicated that they were uninsured in 2013, McKinsey found.

That's actually a significant increase compared to earlier surveys conducted by McKinsey between November and January. Previously, only 11% of respondents who had signed up for 2014 coverage indicated that they had lacked healthcare coverage during the prior year.

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Of all the individuals who were previously uninsured, which was slightly more than half of those surveyed, 10% indicated that they had enrolled in coverage for 2014. That compared to only 3% of previously uninsured respondents who indicated that they had acquired coverage between November and January.

More than 4 million individuals have selected health plans through the state and federal exchanges, according to the CMS. The Congressional Budget Office has projected that roughly 6 million individuals will sign up for coverage prior to the end of the open enrollment period on March 31. But the enrollment figures released by the federal government don't weed out individuals who signed up for a plan through the online marketplaces but then failed to make their first premium payments, which is required before they are actually covered.

The McKinsey study included individuals who have obtained healthcare coverage both inside and outside the exchanges. But it provides some indication regarding how many individuals are following through with payments once they have signed up for coverage. More than three quarters of those individuals who signed up for a plan indicated they made their first payment to an insurer. But there was a significant divide between those who were previously uninsured and those who were merely changing plans. Barely half of those who were previously uninsured indicated that they had made a payment, compared to 86% of those who were previously insured.

The most common reason cited by individuals for why they had failed to acquire coverage was affordability, with half of February respondents indicating that coverage was too costly. But ignorance about the new marketplaces also remains high. Of those eligible for subsidies under the Patient Protection and Affordable Care Act, more than 60% were either unaware of that fact or didn't know how much the subsidy would be.

Another recent survey, conducted by the Urban Institute, found a widespread lack of knowledge about the federal healthcare law among key constituency groups. Nearly a quarter of uninsured individuals indicated that they were unaware of the state and federal exchanges where they can shop for health plans and potentially access subsidies. The study found similar levels of ignorance about the government-run online marketplaces among poor adults and individuals ages 18 to 34.

McKinsey surveyed 2,094 individuals between Feb. 4 and 13. Similar surveys, conducted between November and January, had more than 4,000 respondents.

Timothy Jost, a healthcare expert at Washington and Lee University School of Law, points out that the individual marketplace has traditionally been very turbulent, with individuals falling in and out of coverage. Because of that, it might be difficult to accurately pin down exactly how many 2014 enrollees were previously without coverage.

“Over time we are going to pick up a lot more of the uninsured,” said Jost, a supporter of the federal healthcare law. “Given all the problems, I think the people who have been able to persevere and get through are people who really need health insurance.”

Follow Paul Demko on Twitter: @MHpdemko


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