Many Obamacare Dropouts in California Picked Up Employer Coverage, State Says

Nearly half of the estimated 700,000 Californians who have dropped their Obamacare policies during the past two years have enrolled in an employer-based plan, a new report from the Covered California exchange shows.

In a news conference Thursday, Peter Lee, the organization’s executive director, said there were about 1.3 million Californians enrolled in the exchange’s plans as of June 30. That was about two-thirds of the 2 million who have enrolled in the exchange since it opened Oct. 1, 2013.

Lee said the exchange always expected that a range of circumstances would cause many of those who initially signed up to depart.

“This finding underscores that for many, Covered California is not an endpoint,” Lee said.

According to the exchange, 44% of the 700,000 who left did so for policies offered by their employers; 16% enrolled in Medi-Cal, the state’s insurance program for the poor; 15% returned to the ranks of the uninsured; 13% obtained private coverage outside of the exchange; and 11% enrolled in health plans from other sources.

Covered California did not specify why some of its enrollees became uninsured again.

Anthony Wright, executive director of Health Access, a nonprofit group that advocates for increasing the number of Californians with health insurance, said these people deserve more attention.

“We need to know what caused these folks to drop out. Was it confusion, affordability or something else?” he said.

Finding enough new enrollees to not only replenish the lost ranks but also expand membership is important if the exchange is to reach its long-term goal of insuring more than 2 million people statewide.

Enrollment is now at the low end of projections made in early 2014, which ranged from 1.3 million to 1.7 million people, according to Covered California. Estimates for the coming year are more conservative than they were for the previous year — from 1.3 million to 1.5 million by June 30, 2016.

The individual insurance market, which includes Covered California, is known industry-wide to have some enrollment volatility, said Cynthia Cox, assistant director of health reform and private insurance for the Kaiser Family Foundation. She added that although getting a large number of Californians signed up for coverage is vital, it is not everything.

“Raw numbers are important because you look attractive to insurance companies so that they will continue to participate and compete with each other. At the same time, these enrollment goals are not meant to be set in stone,” Cox said.

She said a more significant measure is whether enough young and healthy people are enrolled to make up for the costs incurred by older policyholders, who are more likely to use healthcare services.

“That is the key to keeping premiums low,” she said. “So far, California is stronger than a lot of states in terms of enrolling its potential market.”

Lee said while the percentage of young enrollees in California has not reached its full capacity, actuaries have judged the overall mix of enrollees to be healthy enough to hold statewide premium increases to 4%.

In addition to the breakdown of those who have left the exchange’s plans, Covered California released more data on who has remained enrolled. It said 9 in 10 enrollees are receiving subsidized coverage.

A breakdown of race and ethnicity showed that 37% of Covered California policyholders are white, 29% are Latino, 23% are Asian and 2.4% are African American.

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