Patient Responsibility News

Higher Insurance Premiums Drive Patient Health Exchange Exits

Twenty percent of patients dropped the Health Exchanges because of high insurance premiums.

Higher health insurance premiums are causing patients to drop the health insurance exchanges, CMS reports.

Source: Thinkstock

By Sara Heath

- High insurance premiums and patient costs have caused 1.5 million individuals to end their Health Exchange coverage in 2017, according to a CMS report.

These patients either terminated their coverage after paying at least one month’s premiums or ended their coverage by not paying their first month’s premiums.

Using exit survey data, CMS concluded that rising out-of-pocket health insurance costs have caused patients to choose to leave their current health plans. Overall, the survey yielded four key findings:

  • Consumers with higher premiums were more likely to terminate or cancel coverage.
  • Consumers listed lack of affordability as one of the most common reasons for not paying for the first month’s coverage.
  • Disruptions in coverage options lead to fewer consumers retaining their coverage.
  • Consumers without financial assistance were more likely to terminate or cancel coverage.

Overall, 27 percent of patients who terminated their exchange coverage cited cost or financial barriers.

“Consumers who canceled coverage prior to paying their first premium indicated that high costs and lack of affordability were the most common factors for canceling their coverage, or not paying the first month’s premium,” the agency said in its report.

Twenty percent of these patients cited premium increases as the primary financial obstacle.

Premiums have more than doubled in recent years, CMS reported. In 2013, individuals purchasing health plans on the Health Insurance Exchange paid an average of $232 in monthly premiums. That price has increased to $476 each month, a 105 percent price jump.

Premiums increased by 105 percent between 2013 and present.

Source: CMS

Patients who exited the Exchange were more likely to pay higher monthly premiums than those who retained their coverage. On average, patients who ceased their coverage paid $209 monthly compared to about $150 monthly for those who remained on the Exchange.

Seventeen percent of patients reportedly could not pay their premiums or continue their healthcare coverage because they did not qualify for government financial assistance.

Many patients also exited the exchanges because they gained coverage from other sources. Sixty percent of patients who ceased their Exchange coverage after paying at least one premium reportedly gained employer-sponsored coverage. Twenty-two percent of these patients said they became eligible for Medicare and thus ended their Exchange coverage.

Issuers leaving the Exchange for 2017 also led to coverage drops. Thirty percent of patients whose issuers exited the Exchanges also ended their Exchange coverage. Conversely, 30 percent of patients whose issuers remained on the Exchange dropped their coverage.

Patients whose insurance issuer exited the Exchanges were more likely to exit as well.

Source: CMS

These findings suggest that the Health Insurance Exchanges offer a cost-prohibitive option for health insurance coverage, limiting healthcare choice for patients, CMS deduced.

“Higher premiums and ineligibility for financial assistance combined with limited health plan choices caused some consumers to cancel or terminate coverage,” the report concluded. “The report shows that individuals who are personally responsible for more of their premium and have higher out-of-pocket costs, are most affected by premium increases.”

HHS Secretary Tom Price issued a statement reiterating those points, saying that the department is working on putting healthcare back into the hands of the states, patients, and families.

“Not surprisingly, as costs continue to go up, fewer Americans can afford to pay more and get less for healthcare,” Price said. “Many individuals and families across the country are tired of having their healthcare options dictated to them by Washington – particularly when those limited options are unaffordable.”

“That’s why every day we are working on behalf of President Trump on solutions that will show a little humility from the federal government, equip states to serve their unique and diverse populations, and put healthcare decisions in the hands of patients, families, and their doctors,” he concluded.


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