Plan Value, Expected Care Use Drove ACA Consumers into Uninsurance More than Cost

Among Californians enrolled in the Affordable Care Act marketplace, perceptions about plan value and expectations about how often they would need healthcare services were more likely to motivate them to drop their coverage for uninsurance than cost-related reasons, a study published in JAMA Health Forum found.

The researchers used data from Covered California, California’s Affordable Care Act marketplace. The data came from the timeframes immediately following three open enrollment periods (2018, 2019, and 2021) as well as administrative data from the beginning of 2014 to the end of 2021. The administrative data encompassed 5.4 million enrollees.

“Despite success enrolling many long-term uninsured initially, the marketplaces experience substantial turnover, or churn, with many individuals terminating their coverage each year,” the report explained.

The researchers noted that the level of churn in the marketplace could be cause for concern if Affordable Care Act marketplace costs are driving consumers out of the marketplace, but it could also signal that the marketplace is successfully preventing coverage gaps between sources of health insurance.

Before enrolling on the Affordable Care Act marketplace, more than half of all enrollees reported that they had employer-sponsored healthcare coverage (56 percent).

Consumers left the Affordable Care Act marketplace to enroll in Medicaid or employer-sponsored health plans. A mean of 46 percent of individuals whose coverage was terminated enrolled in employer-sponsored health plans. A mean of 24 percent of individuals whose Affordable Care Act plans were terminated enrolled in Medicaid.

A mean of 14 percent of those who left the Affordable Care Act marketplace became uninsured.

The highest share of enrollees leaving the marketplace for zero healthcare coverage was highest in 2018. The experts speculated that this was due to the individual mandate penalty being zeroed-out. Excluding the impact of that factor, however, the share of enrollees that transitioned to uninsurance was comparable to other years (13 percent).

Separate research indicated that after the elimination of the individual mandate, uninsurance increased and access to affordable care decreased in the Latino community.

In 2019, for subsidized renewal candidates, 1.3 percent went uninsured. Risk factors for going uninsured included Latino heritage, awareness about the individual mandate repeal, those who gave their plans low ratings on value, and candidates with no expected doctor visits for the next year. Consumers who did not anticipate high healthcare utilization in the coming year were more likely to drop their Covered California plan.

The median length of coverage was slightly more than a year—14 months. Within a year of selecting Affordable Care Act marketplace coverage, more than four out of ten enrollees would choose to disenroll (41 to 46 percent) between 2014 and 2020, excluding 2019.

However, those who did not leave California’s Affordable Care Act marketplace in the first year tended to stay in the marketplace longer. Between 30 and 37 percent of individuals who stayed longer than a year retained their Affordable Care Act marketplace coverage for two years or more.

Individuals who had lower incomes—150 percent of the federal poverty level or below—were more likely to be in Affordable Care Act marketplace plans for shorter periods of time. Black and Latino enrollees were also more likely to have shorter tenures on Affordable Care Act plans.

Additionally, individuals who selected bronze plans or high-deductible minimum coverage over silver plans were more likely to stay on the Affordable Care Act marketplace for shorter timeframes.

On the other hand, self-employed individuals and those who paid a dollar per member per month for coverage were more likely to remain in the Affordable Care Act marketplace.

“Our analysis of renewal candidates allowed us to better understand the motivations behind the decision to go uninsured and suggests that perceived low plan value and low expected use, and not cost, play a greater role in decisions to disenroll from coverage,” the researchers concluded. “How consumers experience their plan matters; those who do not regularly access care are less likely to pay for the protective value of insurance.”