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Report: Newly Insured Slightly Less Healthy Than People with Job-Based Coverage

By Andrew Siddons, CQ Roll Call

March 30, 2016 -- People who gained health insurance through the 2010 health care overhaul seem less healthy than people who previously bought coverage on their own—but the newly insured are only slightly less healthy than workers with job-based coverage, according to a report by the Blue Cross Blue Shield Association (BCBS).

Previously, people with preexisting conditions, if not covered through an employer's plan, often had trouble finding or affording health insurance on their own. But the law banned insurers from charging more or denying coverage because of consumers' health conditions.

Compared to people with employer-provided insurance, individuals who enrolled in health plans through new exchanges starting in 2014 had higher rates of conditions like diabetes, depression and coronary artery disease—but the difference was not dramatic. In 2015, for instance, for every 10,000 newly enrolled members with coverage for individuals, 456 people had diabetes, compared to 424 out of 10,000 members with job-based coverage.

When comparing newly enrolled people with those who bought individual plans before 2014, however, the contrasts are much sharper. Consumers who signed up earlier seem in much better shape—likely because they were healthy enough to obtain and afford individual plans before the health care law made everybody eligible, regardless of their physical conditions. Out of 10,000 members who initially enrolled before the new insurance exchanges opened, only 235 had diabetes in 2015.

Rates of service for newly enrolled individuals were also higher than employer-based group members, but only moderately. For every 1,000 newly enrolled members who bought coverage on their own, there were 83 inpatient admissions and 1,717 outpatient visits. For 1,000 employment-based members, those figures were respectively 60 hospitalizations and 1,554 visits.

The findings seem to suggest that part of President Obama's vision for the health care law is being realized, as patients with preexisting conditions obtain health coverage.

But they also suggest that people may not be taking advantage of the services available to them, including preventive care. The newly enrolled members and those with employer plans both had a higher rate of emergency room visits than the generally healthier people who enrolled in individual plans before 2014. 

Analyzing data from 30 million members of Blue Cross insurance companies, the report found that newly enrolled individuals on average had medical costs of $559 per month in 2015, 19 percent higher than all the members of employer-based groups covered by Blue Cross Blue Shield plans, whose average costs were $457 per month.

The Department of Health and Human Services (HHS) pushed back on the report, saying the comparison between newly insured and previously insured in the individual market was flawed. The department framed the report as evidence for why the health care overhaul was needed in the first place.

The department also argued that the report provided a skewed picture of how consumers covered in the individual market compare to people in employer-provided insurance because it contrasted only newly insured people in the individual market with everyone in job-based BCBS insurance.

HHS also pointed out that in response to predictions that the newly insured would be costlier, the health care law created transitional stabilization programs to help insurers avoid big losses.

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