Insurance Dropouts Present a Challenge for Health Law

Stephanie Douglas signed up for health insurance in January with the best intentions. She had suffered a stroke and needed help paying for her medicines and care. The plan she chose from the federal insurance exchange sounded affordable — $58.17 a month after the subsidy she received under the Affordable Care Act.

But Ms. Douglas, 50, who was working about 30 hours a week as a dollar store cashier and a services coordinator at an apartment complex for older adults, soon realized that her insurance did not fit in her tight monthly budget. She stopped paying her premiums in April and lost her coverage a few months later.

“When you owe on your house, on your truck, when you’re a single parent of a college student and you have other bills,” she said, “it just doesn’t work.”

On Nov. 1, a new sign-up period for health insurance under the Affordable Care Act will begin, and insurers, health care providers and enrollment groups are ramping up campaigns to encourage 10.5 million eligible uninsured people to buy policies. But even as those efforts begin, the public insurance exchanges, also known as marketplaces, created by the law are facing another challenge: keeping the customers they already have.

About 9.9 million people were enrolled in the federal and state marketplaces at the end of June, a drop of about 15 percent from the 11.7 million who the Obama administration said selected plans during the open enrollment period that ended in February.

Though there is no comprehensive data on why people drop or lose their marketplace coverage, enrollment counselors, health care providers and consumers say cost is a factor. In some cases, people lost jobs or their income dropped after they enrolled. Other people signed up for coverage only to decide later that they could not afford it. Still others dropped their insurance after their federal subsidies — intended to help pay premiums — were reduced or eliminated because the government could not verify their incomes or concluded that they were earning more than they had reported on their applications.

The cost of marketplace coverage may be particularly challenging for some in Mississippi and 19 other states that have not expanded Medicaid to provide largely free health care for people earning up to 138 percent of the poverty line. Many of these people can receive federal subsidies to help pay for private plans. But the subsidies do not always help enough.

In Mississippi, even though 95 percent of those who enrolled — more than in any other state — received subsidies, the state still has had among the highest rates of attrition from marketplace plans this year. From March 31 to June 30, the number of enrollees dropped by 8 percent, to 73,223 from 80,011, according to the Centers for Medicare and Medicaid Services.

Experts also point to another factor behind dropping or losing coverage: confusion. Some who signed up for coverage this year lost it within months because they did not understand what information they had to supply or even that they were required to make monthly payments, according to counselors who help people enroll in marketplace plans. In many cases they may have simply failed to provide a Social Security number on  the application and did not respond to follow-up requests for it. Mikel Rogers, an enrollment worker at Brooklyn Family Health Center outside Hattiesburg, Miss., said letters from the marketplace asking for additional documents were hard to understand, especially for people who had never had health insurance before.

“I’ve looked at these letters and said, ‘O.K., I have a bachelor’s degree and I wouldn’t understand this, either,’ ” Ms. Rogers said. “It’s just not worded clearly.”

Monica Gonzalez, navigator program manager at the Epilepsy Foundation of Florida, which has a federal grant to enroll people in marketplace plans, said that, for many who lost coverage this spring, the problem began when the marketplace could not verify the annual income they listed on their application, or their citizenship status.

About 423,000 people in the 37 states that use the federal marketplace lost their 2015 coverage by June 30 because they had not provided sufficient documentation of their citizenship or immigration status, according to the Centers for Medicare and Medicaid Services. And for about 967,000 households in those states, their premium subsidies — and for some, a separate category of subsidies that helps cover their co-payments and deductibles — were recalculated because of “income inconsistencies.”

Although some people’s subsidies could have increased under that scenario, others abruptly began receiving smaller subsidies or lost them completely, according to enrollment counselors and consumers in half a dozen states. In some cases, these people did not realize their subsidy had shrunk or disappeared until they started getting higher bills from the marketplace or their health care providers.

Walter Whitlow, 56, a remodeling contractor in Volente, Tex., said he had never seen the emails the federal marketplace sent him asking for additional proof of income after he signed up for a Humana plan in January. Doctors diagnosed throat cancer in February, and in June he learned from his oncologist’s office that his monthly premium had gone to $439 from $103 and his deductible to $4,600 from $900.

Mr. Whitlow was able to keep his plan, but only because his sister, Ali Knight, had taken over his premium payments after his cancer diagnosis and could afford to cover the higher price.

Mr. Whitlow’s subsidy and lower deductible have been reinstated — with Ms. Knight’s help, he provided the necessary proof of income after she helped him find the emails requesting it — but he now owes thousands of dollars in medical bills accumulated during the two months that his deductible was higher.

Ms. Knight said there were probably a lot of people who had experienced similar problems but lost their coverage because they had no help. When her brother signed up, she said, he asked the marketplace to correspond with him only by regular mail because he was not used to email.

“I don’t know how you wrap your head around trying to fix something like this,” Ms. Knight said.

Ben Wakana, a spokesman for the Department of Health and Human Services, said that when the federal marketplace needs additional information from customers, it notifies them about the steps they need to take “as many as 14 times through phone calls, emails and letters.” He added that the marketplace has simplified the language it uses when asking for more documentation.

Some people say they lost coverage because they never received, or perhaps never read through, information from the marketplace or their insurer.

George Dixon, 23, of Hattiesburg, said the plan he signed up for in 2014 was automatically renewed for 2015, and he kept paying the same premium he had paid last year: $34.35 per month. He did not realize his rate had increased slightly until he received a letter from Magnolia Health in April saying his policy had been canceled because he had not paid the full amount for three months.

Mr. Dixon said that if the marketplace or his insurer had tried to inform him of the price change before it took effect, he had never seen the letter. “It just popped up on me,” he said.

Sometimes people leave marketplace plans for good reasons, such as getting a job that provides health insurance.

“This market is always going to be a temporary way station for some people until they get a job with health benefits,” said Larry Levitt, a senior vice president of the Kaiser Family Foundation, a nonpartisan health research organization. “Where I would get worried is if there starts to be evidence that people are dropping out because their insurance is becoming unaffordable, or they just don’t feel it offers them good value.”

Mike Chaney, the insurance commissioner in Mississippi, said some of the attrition in his state could be due to unhappiness with the provider networks offered by Magnolia Health, the insurer that offered some of the least expensive plans here for 2015.

“We are trying to work with them to be certain they are handling customer complaints, number one, and number two, that their networks are sufficient,” Mr. Chaney said.

A spokeswoman for Magnolia declined to comment.

In the 20 states that have not expanded Medicaid, many people whose incomes are above the poverty level can qualify for subsidized private coverage. But like Ms. Douglas, who said she earned about $19,000 last year, many may struggle to pay for the coverage month after month even with substantial subsidies.

Ms. Douglas, who said she was unaware of the debate over expanding Medicaid, said she was returning to school and hoped to get a degree that would help her find full-time work. For now, she is taking aspirin instead of a prescription blood thinner to prevent another stroke and stretching the statins she takes to lower her cholesterol.

“My prayer is that God will show favor for my employment status to move from part time to full time,” she said. “I don’t want to keep trying to get something I can’t pay for.”

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