By Chelyen Davis

Published by The Free Lance-Star on Novemeber 22, 2013

A new study says more than three-quarters of the 403,000 Virginians younger than 65 with individual health insurance coverage could qualify for some level of federal tax subsidy by buying health insurance through the federal marketplace.

But that leaves about 83,000 Virginians who might find their existing insurance canceled who won’t qualify for the subsidy help.

The data come from a Families USA report released Tuesday that was intended to demonstrate how relatively few people are affected by the cancellation of their individual insurance policies by insurance companies to comply with Affordable Care Act standards.

Families USA is a group that’s been advocating for the federal health care law.

Little hard data is available on how many people have had their policies canceled, although the issue has been in the headlines in recent weeks because it belies the president’s oft-repeated promise that if people liked their insurance coverage, they could keep it.

On a press call Thursday, Families USA Director Ron Pollack said his group estimates that only 0.6 percent of the non-elderly—i.e., people younger than 65—population is at risk of losing current coverage without being eligible for financial help (the tax subsidies created by the ACA for people making less than 400 percent of the poverty level) to pay insurance premiums.

That’s still about 1.5 million people, Pollack said, 83,000 of them in Virginia.

“And that’s not trivial. I don’t in any way suggest we shouldn’t be concerned about that,” Pollack said.

But, he added, “that number is a tiny fraction” of people who ACA backers say will get better coverage because of the federal law’s changes to the insurance system.

“Frankly, while obviously this is a concern for anyone receiving a termination notice, especially if they have not yet found an alternative that is at least as good I believe that this concern has been blown significantly out of perspective in terms of the totality of the Affordable Care Act,” Pollack said. “The overwhelming majority of people with private individual health insurance today will soon be able to receive better coverage and pay lower premiums due to the Affordable Care Act. As a result their improved health coverage will become much more affordable.”

The Families USA study says that 403,000 Virginians younger than 65 have individual health insurance plans. Of those, the report says, 320,000, or 79 percent, make less than 400 percent of the poverty level, which means they could qualify for some level of federal tax subsidy to help pay insurance premiums.

Of the remainder, 0.4 percent have individual coverage and are expected to retain it for more than a year.

“The individual insurance market is often thought of as the Wild, Wild West of health insurance,” Pollack said. “It is an extraordinarily volatile market.”

Pollack said subsidies should make policies more affordable for many people, even if the actual price of the new insurance plans is higher because the ACA requires new policies to cover more things.

“There’s no question that when people get better coverage, it is likely to mean they are going to pay somewhat higher premiums. You don’t get anything for nothing,” Pollack said. “It does have a tendency to increase premiums when you provide better coverage. [Subsidies] can more than make up for the increase in premium cost because you’re getting better coverage.”

Pollack was asked if his report’s numbers reflect the “coverage gap” experienced by people who make below the federal poverty level. In states like Virginia that have not expanded Medicaid eligibility, childless adults below the federal poverty level not only aren’t eligible for Medicaid, they’re also not eligible for federal tax subsidies to buy health care.

While those are “the people at greatest risk and harm” from not getting insurance coverage, Pollack said, they also tend not to have purchased individual insurance coverage because they can’t afford it. As a result, he said, those in that coverage gap don’t add significantly to his group’s estimate of people who would be affected by canceled plans.

Last week President Barack Obama publicly urged insurance companies to temporarily renew old insurance policies for the customers who’ve had their insurance canceled recently.

Since then, Virginia’s Bureau of Insurance has been analyzing whether it can comply with that.

In a statement Wednesday, the BOI said it is “unclear whether the Bureau has the authority” to fully implement the president’s recommendation. But, the statement said, the BOI can permit insurance companies to give customers early renewal of existing insurance policies so that coverage extends for another year.

The board is thus encouraging insurance providers to offer those extensions through the end of 2014, and promising to expedite approval of any rate revisions necessary.