Jan. 21—Health insurance plans in new government-run marketplaces will be little impacted by President Barack Obama’s November decision to allow millions to remain on individual plans that do not meet the requirements of the Affordable Care Act (ACA), according to a new RAND Corporation study.

The study examined the impact of Obama’s Nov. 14, 2013, decision to allow continuation of individual market plans—when also allowed by state insurance regulators—that had been slated for cancellation due to new requirements of the ACA. The waiver, which lasts for a year and could be extended, came after criticism that millions of consumers in the nongroup market were losing their existing health insurance plans despite Obama’s often-repeated promise that the ACA would not cause any loss in coverage.

Among the concerns with the waiver was that it would allow millions of potential enrollees in the marketplaces created by the ACA to instead remain in the preexisting plans. Because the older plans were generally restricted to healthier applicants, some experts worried the loss of those enrollees in the new marketplace place would cause sicker customers to dominate in those plans and undermine their solvency.

Results Detailed

Using a microsimulation model, the RAND study concluded that if Obama’s waiver resulted in half of the preexisting plans continuing, then the new ACA market plan premiums will increase less than 1 percent, or approximately $25 for a 40-year-old. Most enrollees would not notice the increase, the authors concluded, because of the ACA-provided subsidies that most are expected to receive.

“Our analysis shows that plans to allow individuals to keep their old policies will not threaten the short-term viability of the new individual insurance marketplaces,” Evan Saltzman, the study's lead author and a project associate at RAND, a nonprofit research organization, said in a release.

The authors projected that enrollment in ACA plans will fall by about 500,000 consumers, or 4 percent, because of the Obama waiver.

The study also concluded that two leading legislative proposals that took different tactics to address the widespread individual market cancellations would have much larger impacts on ACA marketplace plan premiums and enrollments.

Obama’s waiver also was not expected to have much effect on the total number of people who have insurance coverage.

“What this result indicates is that few people having their plans cancelled in the non-ACA-compliant market would prefer to go without insurance, particularly given the individual mandate penalty and any potential subsidies to purchase a plan in the Marketplace,” the authors wrote.

Publication Date: Tuesday, January 21, 2014