Why millions still shun the exchanges to buy individual health plans
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Ohio to save $240M in Medicaid drug costs by running its own PBM
      MACPAC approves recommendations on specialty drugs, behavioral health
      Top R.I. state official will take over, review hospital agency
      No region in the world spared as virus cases, deaths surge
    • No region in the world spared as virus cases, deaths surge
      We're losing engaged providers, and healthcare will pay the price
      J&J vaccine problems hamper U.S. military vaccines overseas
      U.S. suicides dropped last year, defying pandemic expectations
    • Calls mount for Biden to track U.S. healthcare worker deaths from COVID
      Front-line workers want more assistance after a year of COVID-19
      Healthcare providers enter Philadelphia's legal fight to enact gun laws
      Taking population health expertise to the market
    • Cigna and Oscar expand their small business partnership
      5 things to know about Agilon Health's proposed IPO
      More than a half million Americans gain coverage under Biden
      Insurance auto-retention policies could halve number of people kicked off coverage
    • MACPAC approves recommendations on specialty drugs, behavioral health
      No region in the world spared as virus cases, deaths surge
      CMS wants to bump pay for hospices, SNFs next year
      MACPAC wants to cut Medicaid spending on high-cost specialty drugs
    • Outgoing UHS chief made almost 50% less in 2020 than 2019
      A hundred dollar bill cut into strips with a colorful background.
      Population health still at odds with fee-for-service
      Private equity could increase long-term Medicare spending, MedPAC says
      Jeb Bush, Marilyn Tavenner getting in on healthcare SPAC frenzy
    • Healthcare data breaches
      By the Numbers: National health information service providers
      Health systems are navigating the digital divide and vaccine access
      woman doctor shaking hands with nurse and smiling
      Sponsored Content Provided By Philips
      A stronger healthcare system requires bold new ways of working together
    • Fight against STDs lost amid coronavirus testing blitz
      Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
      Hospitals vary widely in reducing C-section rates, but some progress in other maternal health metrics
      Home improvement to be provided by ProMedica's new healthy homes initiative
    • Novant Health adds chief payor performance officer
      Kaiser Permanente names Comer chief IT officer
      Mass General Hospital's Slavin to retire as CEO
      UnitedHealthcare names Thompson as new CEO
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
      Dr. John Fischer
      Patient-reported outcomes tool for hernia surgery helps physicians improve care
      New care model helps primary-care practices treat obesity
    • A family photo of the the Hangens.
      Stressing the already burdened pediatric behavioral health system
      Jennifer Pannone and her daughter Victoria.
      Mental health access for children needs attention
      What's next for on-demand telehealth companies?
      A CalOptima PACE vaccination clinic.
      Will COVID-19 be the catalyst for creating a more sustainable healthcare system?
    • Ryan McGinnis
      Finding efficiencies in the OR using tech
      Dr. Daniel Hall
      UPMC pilots machine learning, telehealth to inform patient transfers
      A woman being recorded using her inhaler on a smartphone.
      Digital check-ins, connected inhalers help control asthma
      A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Nearly 1 in 5 Americans skipped care due to cost last year
      COVID-19 long-haulers need holistic treatment, providers say
      Amazon expanding employee clinics into two more states
      What's next for on-demand telehealth companies?
    • Malpractice premiums peak in 2020, AMA survey shows
      A rendering of a cancer research institute at the University of Southern California that will include 5G.
      Healthcare providers determine how to best use ultrafast 5G
      Two-thirds of largest hospitals aren't complying with price transparency rule
      'Silver lining': Hospitals keep practices born in COVID rush
    • Addressing long-standing barriers needed for mental and physical health integration
      A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      The waiting room of a Kaiser Permanente clinic at a Target location.
      Health systems revamp their approach to retail clinics
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
    • CMS wants to bump pay for hospices, SNFs next year
      CMMI pauses new Direct Contracting model applications
      CMS wants to boost payments over 2% for inpatient rehab, psych facilities
      40 Oregon providers, insurers sign value-based care pact
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Dr. Alan Kaplan
      The risks, rewards of taking organizations 'where they haven’t gone before'
      Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
    • Drs. Hal Paz and Joshua J. Joseph
      Mobilized to fight the COVID crisis: a blueprint for community and academic partnerships
      Dr. Stephen Markovich
      Making sure we're aligned along the path to achieving inclusion
      Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
    • We're losing engaged providers, and healthcare will pay the price
      Bonnie Castillo and John Welton
      Dueling opinions: The role of mandated nurse staffing ratios
      Dr. Chris DeRienzo
      How COVID-19 broke health systems and made them stronger
      Still crossing the quality chasm: a look at the IOM's seminal report 20 years later
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Voting Open - 50 Most Influential Clinical Executives
      Nominations Open - Top 25 Innovators
      Nominations Open May 24 - Top 25 Emerging Leaders
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Minorities in Healthcare
      • - Luminaries
      • - Top 25 Minority Leaders
      • - Minorities to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • emburse certify modern healthcare custom media webinar logo lockup
      Sponsored Content Provided By Emburse
      Webinar: Making it easy to manage costs
      virtualmed staff modern healthcare custom media logo lockup
      Sponsored Content Provided By VirtualMed Staff
      Webinar: Best practices for creating a successful telepsychiatry program
      telehealth visit man touching neck while speaking to doctor on computer
      Sponsored Content Provided By Accumen
      Webinar: How telehealth has evolved into a standard of care
      modern healthcare custom media and trimedx custom webinar logo lockup
      Sponsored Content Provided By TRIMEDX
      Webinar: Bridging the gap between clinicians and administration to improve capital equipment planning
    • Women Leaders in Healthcare Conference
    • Social Determinants of Health Symposium
    • Healthcare Transformation Summit
    • Leadership Symposium
    • Virtual Briefings
      • - Hospital of the Future
      • - Mental Health
      • - Patient Safety & Quality
      • - Strategic Marketing
      • - Virtual Health
      • - Workplace of the Future
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Dr. Chris DeRienzo
      Next Up Podcast: Building team spirit in the wake of COVID-19
      Mikelle Moore
      Next Up Podcast: Mikelle Moore on recognizing all hospital workers during the pandemic
      Empty boardroom
      Next Up Podcast: What's going to happen tomorrow? Succession planning during emergencies
      Next Up Podcast: Educating patients on the COVID-19 vaccine with Tanya Andreadis
    • Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
      Beyond the Byline: How COVID-19 has impacted hospital finances
      An older man sitting on a hospital bed with his back toward the camera.
      Beyond the Byline: Upcoding could explain why hospitals are increasingly billing for the most complex treatment
      Beyond the Byline: Insurers are betting on virtual-first plans as COVID-19 shifts care pathways
    • James garvert neustar healthcare insider podcast image
      Building on basics
      Healthcare Insider Podcast Episode Art - Premier
      Why Roger Weems and other consultants are leaving the big firms to join Premier
      James garvert neustar healthcare insider podcast image
      Outreach during COVID-19
      ann barnes healthcare insider podcast image
      Leading with intention to promote diversity and inclusion
    • The Check Up: Matt Eyles
      The Check Up: Matt Eyles of AHIP
      The Check Up: Dr. Tom Shanley
      The Check Up: Dr. Tom Shanley of Lurie Children’s Hospital of Chicago
      The Check Up: Dr. Harold Paz
      The Check Up: Dr. Harold Paz of Wexner Medical Center at Ohio State University
      The Check Up: Pat Schou
      The Check Up: Pat Schou of the Illinois Critical Access Hospital Network
    • ivana naeymi-rad one on one intelligent medical objects
      Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Insurance
May 08, 2015 01:00 AM

Why millions still shun the exchanges to buy individual health plans

Bob Herman
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Kelly Fristoe operates his financial planning company in Wichita Falls, Texas, an oil-producing town about 140 miles northwest of Dallas, near the Oklahoma border.

    As part of his job, Fristoe, CEO of Financial Partners, helps people in the area buy health insurance both on and off the exchanges created by the Affordable Care Act.

    The oil industry, like other resource-based businesses, is fickle with people's incomes. That can directly affect how people buy and retain coverage in the individual market under the healthcare law, Fristoe said. When times are good, well-paying jobs usually follow. Insurance is easier to afford if companies don't offer it.

    More recently, the price of crude oil has fallen precipitously. When that happens, employees in oil havens brace for pay cuts and layoffs. And even small changes in income can affect whether it makes sense to shop for health coverage in the Affordable Care Act's exchanges.

    The exchanges were built as an outlet for people to buy more affordable health plans in one streamlined setting if their jobs didn't provide any coverage. Americans who make less than 400% of the federal poverty level receive tax credits that go toward paying premiums, and those who earn less than 250% can receive additional cost-sharing subsidies to help pay down deductibles and copayments. Exchange plan subsidies are also at the center of a major U.S. Supreme Court case to be decided next month.

    But what about those at the general cutoff? An individual at 400% of poverty makes about $47,000 per year, while a family of four makes $97,000—by no means poor, but firmly in the trenches of the middle class. Do they decide to purchase health insurance through the exchanges knowing they won't receive financial assistance, or do they buy directly from health insurers and brokers?

    “Right there at 400%, it could go either way,” Fristoe said. It depends on plan design, other ancillary costs and sometimes politics.

    Instead of one, seamless individual market, the ACA has generated "two different marketplaces for the same kind of product,” said Katherine Hempstead, the director of health insurance research at the Robert Wood Johnson Foundation. And health insurance companies continue to sell millions of plans to people off the exchanges, a group of people often overshadowed by consumers navigating the new exchanges.

    “In many ways, this is a lost population,” Kev Coleman, head of research and data at HealthPocket, said of those with off-exchange coverage.

    Data for off-exchange plans are scant or incomplete because it's not really a homogeneous market, experts say. HHS said last November that 8 million to 12 million people had “individual off-marketplace coverage.” Most research suggests the actual figure is somewhere on the low end of that range, but that would still equal about half of the entire individual market.

    The Kaiser Family Foundation and consulting firm Mark Farrah Associates estimate more than 8 million people had ACA-compliant, off-exchange coverage as of Dec. 31, 2014. That was more than the 7 million people who purchased health plans through state and federal exchanges at the same time. The National Association of Insurance Commissioners and the Robert Wood Johnson Foundation reported similar figures in January.

    Charles Gaba, a Michigan-based blogger who tracks ACA enrollments, estimates that off-exchange plan selections are around 8.5 million. That's behind an estimated 10.7 million people who have paid for an exchange plan.

    And according to a study published in Health Affairs this month, off-exchange or “nongroup” coverage totaled almost 7 million people as of February 2015. However, researchers cautioned that number could be flawed because consumers were confused by the terminology.

    On- and off-exchange enrollment varies a lot by state and is mostly tied to the labor market and insurance regulations, Hempstead said. Some states, such as New Jersey, break down individual enrollment by health insurance company every quarter. Others don't provide any information at all.

    Some health insurers lay out more specific details of their individual membership than others. For example, Humana reported last month it had 731,000 on-exchange plan members as of March 31, compared with a little more than 213,000 off-exchange members. That may seem like a small number for the off-exchange market, but it's actually a 62% increase from the previous three-month period that ended Dec. 31.

    People who don't qualify for subsidies may decide to buy an off-exchange plan because that's what they had done previously. Off-exchange plans are more expensive than on-exchange options, mostly because subsidies don't apply. But in many places they're less likely to rely on narrow networks of providers, Coleman of HealthPocket said.

    However, some low- and moderate-income people who would qualify for subsidies individually also stay away from the exchanges because of the Affordable Care Act's so-called family glitch.

    The Affordable Care Act allows people to get subsidies for exchange plans if the health insurance their employer offers isn't affordable. But the law's definition of affordable (9.5% of income) only applies to individual coverage. An employee who can't afford to add coverage for a spouse and children doesn't qualify for tax credits even if the cost exceeds that threshold.

    Therefore, some Americans buy off-exchange health plans that are more affordable than what they can get at work and more appealing than exchange plans without subsidies. “That's where the gaping hole exists in this law,” Fristoe said.

    Estimates of the number of people affected by the family glitch have ranged from 2 million to 4 million, according to a policy brief by Tricia Brooks, a senior fellow at Georgetown University's Health Policy Institute.

    Health insurers have also gained off-exchange membership in conservative states simply because people despise President Barack Obama's healthcare law.

    “A lot of folks down here are not happy with the administration. They are not happy with this law,” Fristoe said. “They take a stance and say, 'We don't want none of that Obamacare stuff.' And I'm just like really, people? Gosh.”

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Cigna and Oscar expand their small business partnership
    Cigna and Oscar expand their small business partnership
    5 things to know about Agilon Health's proposed IPO
    5 things to know about Agilon Health's proposed IPO
    Sponsored Content
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Minorities in Healthcare
          • - Luminaries
          • - Top 25 Minority Leaders
          • - Minorities to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Women Leaders in Healthcare Conference
        • Social Determinants of Health Symposium
        • Healthcare Transformation Summit
        • Leadership Symposium
        • Virtual Briefings
          • - Hospital of the Future
          • - Mental Health
          • - Patient Safety & Quality
          • - Strategic Marketing
          • - Virtual Health
          • - Workplace of the Future
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing