Beware of the new argument from backers of health reform that people are seeing policies canceled due to “ordinary turnover in both individual and small group plans before there was an Obamacare law,” as one pundit put it recently.
Those arguments are incorrect. The law and its enactment are fueling the cancellations of millions of policies across the country. Here’s what’s going on.
The Federal Register on June 17, 2010, noted an estimate that says “a variety of studies indicate that between 40% and 67% of policies are in effect for less than one year,” referring to individual policies that turn over.
But the Register went on to say that “the percentage of individual market policies losing grandfather status in a given year exceeds the 40% to 67% range.” That means those policies will not be compliant with the Affordable Care Act (ACA) and therefore won’t be grandfathered because their cost-sharing items like co-payments are out of whack with the new law’s standards.