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Why Did So Many People Buy Coverage Away from the ACA Exchanges?

Health Care and Health Insurance
by Cabe Chadick
Health insurers say exchange participation too costly for them
Health insurers say exchange participation too costly for them

In the run-up to the final deadline by which consumers could sign up for health insurance through the federally mandated exchanges, there was significant interest on the part of millions of Americans. In all, more than 7.5 million people signed up, but experts are trying to figure out why that number wasn't larger.

Recent polls have begun to examine just what attracted so many millions of people to sign up for coverage both on and off the exchanges specifically, as only about one in six people signing up through these marketplaces did not have any such coverage over the course of 2013, according to a report from Employee Benefit Adviser. About the same number of people who also didn't have such coverage last year signed up through other means as well, such as those provided by their workplaces and private policies, or through the recent expansion of Medicaid.

Experts believe that there actually might have been a larger number of people who signed up for the exchange had the process not been so confusing, and potentially off-putting, initially, the report said. Prior to the point at which the Obama administration made its huge effort to fix what was wrong with the marketplaces, many Americans might have started looking elsewhere and liked what they found.

What else was involved?
Moreover, it should be noted that the Medicaid expansion in particular might have helped many Americans who would have otherwise used the exchanges to find affordable coverage, rather than go without for another year and incur federal penalties, make their decision more quickly, the report said. For those people, all they had to do was sign up. Interestingly, the 21 states and the District of Columbia which chose to adopt the Medicaid expansion and set up their own exchanges saw their uninsured rates fall by 2.5 percent on average, compared with the 0.8 percent drop in the 29 states which did not take both of those steps.

Now that the open enrollment period is closed until October, health insurance companies and the federal government might want to take the time to evaluate just how appreciable the savings provided by these new policies might be for consumers, and whether they're improving policy issuers' bottom lines in any way. In the end, it turned out that many young people signed up for such coverage, and as a result that might serve to reduce risk in the overall pool.

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