Older Plans Will Not Threaten New Insurance Marketplaces
|Targeted News Service|
Plans to allow people to keep their individual health insurance policies even if they don't meet the requirements of the federal Affordable Care Act are unlikely to send new health insurance marketplaces into a "death spiral," according to a new
Although three options put forward to help people keep their old plans all would cause some disruption of the risk pools that are important to the insurance exchanges, none of the changes would be severe enough to threaten their viability, according to the study.
An option adopted by
The most disruptive of the alternative proposals would both allow people to keep their old health plans and allow others to buy the policies as well. That option would lead to moderate price hikes and sharply lower enrollment in the new marketplaces, substantially increasing federal spending on subsidies for enrollees.
"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," said
After criticism arose over some consumers in the individual market losing their existing health insurance plans,
Two alternative proposals also were put forward in the
Because each of the proposals would divert many young and healthy people away from the new health insurance marketplaces, there has been concern the changes could lead to a self-reinforcing cycle of increasing premiums and enrollment drops that could lead to the implosion of the marketplaces.
RAND researchers used an updated version of the RAND COMPARE microsimulation model, which predicts the effects of health policy changes at state and national levels, to estimate how the three approaches could affect the new marketplaces for individuals under the Affordable Care Act.
All three of the proposals are likely to increase the overall number of people with health insurance because many non-compliant insurance policies are likely to be less expensive than those offered in the new health insurance marketplaces. However, many of the non-compliant policies would likely offer fewer benefits than policies offered in the new marketplaces.
Saltzman and study co-author
In addition, such a plan would trigger an additional
The study, "Evaluating the 'Keep Your Health Plan Fix': Implications for the Affordable Care Act Compared to Legislative Alternatives," (http://www.rand.org/pubs/research_reports/RR529.html) is available at www.rand.org.
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