We’ve been hearing for a while how employer-based health plans are an endangered species. And it appears that beeline to extinction is accelerating. Maybe.
Strangely enough, it’s because things are looking up in the individual market – especially if the Court upholds the legislation later this month when they’re expected to hand down their decision. If that happens, things can only get better, based on a pair of studies in the latest issue of Health Affairs.
In fact, according to the journal, the Patient Protection and Affordable Care Act would actually bring the individual market more in line with employer-sponsored care – leveling the playing field, if you will. To illustrate that, the number crunchers over there simulated what out-of-pocket spending would have been like under full implementation of PPACA for anyone with an individual policy during 2001-08, “including important subgroups – adults with chronic conditions, the near-elderly (ages 55–64), and low-income populations.”
What did they find?
Well, “their average annual out-of-pocket spending on medical care and drugs might have been $280 less. The near-elderly and people with low incomes might have saved $589 and $535, respectively. An important improvement would have been the reduced probability of incurring very high out-of-pocket spending. The likelihood of having out-of-pocket expenditures on care exceeding $6,000 would have been reduced for all adults with individual insurance, and the likelihood of having expenditures exceeding $4,000 would have been reduced for many.”
Of course, this doesn’t address premiums, which almost certainly would have jumped enough to gobble most, if not all, of those out-of-pocket savings. You don’t think all that extra coverage comes cheap, do you?
If the individual market is where we’re headed, though, things need to get better. Based on another study, Health Affairs reports, “More than half of Americans who had individual insurance in 2010 were enrolled in plans that would not qualify as providing essential coverage under the rules of the exchanges in 2014. These people were enrolled in plans with an actuarial value below 60 percent, which means that the plans covered less than that proportion of the enrollees’ health expenses. Many of today’s individual health plans are below the ‘bronze’ level, the lowest level of plan that can be sold through exchanges.”
But today’s group plans would fare far better in an exchange world, with most boasting an actuarial benefit in the 80 percent – 89 percent range, qualifying them as ‘gold’ plans in the exchanges.
If nothing else PPACA will continue to close the gap between the individual and group markets, both in terms or costs and coverage. But at what price?