The cancellations will affect only a small number of people, those who buy individual policies.
In making this claim, the president focuses on the individual market, which he accurately notes covers about 5 percent of Americans. Still, that is about 14 to 15 million people. So far, as of mid November, roughly 4.8 million individual insurance plans have been canceled, with most estimates suggesting that as many as 10 million will eventually lose their current coverage.
But the same conditions that are causing the cancellation of individual policies will eventually result in the cancellation of millions of employment-based policies as well. The only reason that hasn’t happened yet is that the employer mandate was postponed for a year, so employer plans don’t yet have to be ACA-compliant. But they will. Even the Congressional Budget Office estimates that as many as 20 million workers will lose their current employer-sponsored plans. Combine that with those losing individual plans, and more than 30 million Americans cannot keep their current insurance.
It could be far more. As Avik Roy of the Manhattan Institute points out, some 51 percent of the employer-based insurance market will lose grandfathered status and need to make changes to comply with Obamacare provisions. That could mean that, in total, as many as 93 million will lose their insurance. That’s not exactly “a few.”
The policies being canceled are “substandard,” offering few if any real benefits.
No doubt some of the canceled policies really did offer few benefits. For example, the roughly 106,000 mini-med policies discontinued in New Jersey did not provide coverage for outpatient drugs, prenatal care, or ambulance services, and covered only $700 per year for doctor visits. But there is no evidence that most canceled plans offered so little protection.
According to HealthPocket, a health-insurance consulting firm, fewer than 2 percent of individual plans on offer today meet all ACA requirements. The most frequent reason for noncompliance was not a failure to cover hospitalization, as the administration has suggested, but not providing pediatric care, including vision and dental care for children. A worthwhile benefit, perhaps, but if you are childless, it’s hard to see how lacking such a benefit makes your policy subpar.
As for employer plans, mini-med plans such as those in New Jersey make up less than 1 percent of plans. Most employer plans fail Obamacare compliance simply because they do not offer one or more of the ACA-specified benefits, such as maternity care or alcohol rehabilitation.
There may well be actuarial and “pooling” arguments for why such benefits should be part of insurance plans, but that doesn’t mean teetotalers forced to change plans because their current policy does not cover alcohol-rehabilitation services found their plan inadequate.