Insurance Cancellations in Context: Stability of Coverage in the Nongroup Market Prior To Health Reform

Recent cancellations of nongroup health insurance plans generated much policy debate and raised concerns that the Affordable Care Act (ACA) may increase the number of uninsured Americans in the short term. This article provides evidence on the stability of nongroup coverage using US census data for the period 2008–11, before ACA provisions took effect. The principal findings are threefold: 1) only 42 percent of people with nongroup coverage at the outset of the study period retained that coverage after twelve months; 2) 80 percent of people experiencing coverage changes acquired other insurance within a year, most commonly from an employer; and 3) turnover varied across groups, with stable coverage more common for whites and self-employed people than for other groups. These findings suggest that the nongroup market was characterized by frequent disruptions in coverage before the ACA and that the effects of the recent cancellations are not necessarily out of the norm.