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Commonwealth Fund: Individual Market Problematic for Those Who Lose Insurance Coverage

By Nellie Bristol, CQ HealthBeat Associate Editor

April 19, 2012 -- More than 60 percent of those who reported losing health insurance in 2011 had difficulty finding affordable alternatives in the individual insurance market, according to a Commonwealth Fund survey released last week.

One-quarter of adults between 19 and 64 surveyed had gaps in insurance coverage in 2011, and nearly 70 percent were uninsured for a year or more, the report says. When searching for coverage in the individual market during the previous three years, 62 percent said they found it very difficult or impossible to find affordable policies; 38 percent said it was hard to find the coverage they needed; and 31 percent were turned down, charged a higher price or had a medical problem excluded from coverage because of a preexisting condition. Overall, 73 percent had some sort of difficulty purchasing a plan. Respondents also reported difficulty comparing plans, including problems sorting out what benefits were covered and comparing premium costs and out-of-pocket or other cost-sharing responsibilities.

Researchers concluded that the individual insurance market is a "weak stopgap option" for those who lose employer-sponsored insurance or Medicaid. Those who were dropped from insurance most commonly lost coverage because they lost or changed their job or started working part time. Those who were no longer on Medicaid generally became ineligible because of a change of age or income or because they did not re-enroll when required. Low- and moderate-income adults were much more likely to have gaps in health insurance than those with higher incomes, they added.

Gaps in coverage, not surprisingly, led to less medical care, a situation that had "potentially serious implications for [respondents'] health as they lose contact with health care providers, skip needed care and recommended preventive care and screening tests," said Karen Davis, president of The Commonwealth Fund.

Strong backers of the health care overhaul (PL 111-148, PL 111-152), Commonwealth Fund researchers said provisions of the law would reconfigure the individual market, making it more affordable and accepting of those with preexisting conditions.

The survey is part of a series of reports that The Commonwealth Fund is conducting to establish a baseline of insurance coverage before provisions of the health care law go into effect. It included a nationally representative sample of 2,134 adults who completed an online survey in either English or Spanish between June 24 and July 5, 2011. The margin of error was plus or minus 3 percentage points.

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