Big Gaps in Health Insurance Coverage, Report Says

Plans available to individuals offer “weak, stop-gap” option

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As we wait for the Supreme Court to release its ruling on the Affordable Care Act, there may be no better time to reconsider what started the furor over health reform. A new report lays out in the starkest detail why the court’s decision will have profound implications for tens of millions of Americans.

A Commonwealth Fund Health Insurance Tracking Survey released today found that one in four U.S. adults between the ages of 19 and 64 had lacked health coverage for some period of time during the past year. Only slightly more than a quarter of those had never had insurance. But many had experienced lengthy gaps in coverage. Nearly 70 percent had gone without health insurance for a year or more. They’d previously had coverage from a variety of sources, including an employer’s plan, Medicaid, or individual coverage purchased directly from an insurer.

In theory, Commonwealth says, buying individual coverage offers the most likely route out of a coverage gap, but the report calls it a “weak, stop-gap” option. That’s largely because high premiums and high rejection rates and exclusions for preexisting conditions make individual insurance plans either too costly or unavailable to many of the 50 million people in the U.S. who lack insurance. In addition, a large majority of people surveyed said they found it difficult to compare plans’ costs and benefits.

Roughly 18.5 million adults shopped in the individual market in the last three years, says Sara Collins, Commonwealth’s vice president for affordable insurance. But only 10.2 million bought coverage. That, she notes, left 8.3 million out in the cold.

“It’s a very challenging market to negotiate,” Collins says.

Collins contends that the Affordable Care Act may help resolve that problem in several ways. First, it could lower premiums by spreading the costs of coverage over a larger, healthier pool of people and by providing subsidies for low-income people. Second, it will prohibit insurers from rejecting people with a preexisting condition or charging them higher premiums. Third, it could make it easier for consumers to pick plans by mandating that insurers standardize plan benefits and explain their products in simple language. We may eventually find out whether those predictions are true--but if, and only if, the Supreme Court decides in favor of the health reform act. The court’s decision is expected in June.

One thing is certainly true. People who are trying to buy individual health insurance need all the help they can get. It’s help we’re determined to provide, and it’s why we at U.S. News are working hard to develop a method of rating individual health insurance plans.