Half of Employer Plans Could Be Canceled Under Obamacare Starting in 2014
New projections regarding the cancellations of employer-sponsored health insurance plans reveal that between 80 and 93 million people could receive cancellation notices for their health care plans. The plans have been deemed unfit to use after failing to meet the requirements mandated under the Affordable Care Act.
Stan Veuger of the American Enterprise Institute revealed that there are roughly 157 million people covered under employer health care insurance policies, with the possibility that "at least half the people on employer plans would by 2014 start losing plans as well."
"The administration estimated that approximately 78 million Americans with employer sponsored insurance would lose their existing coverage due to the Affordable Care Act," Avik Roy of the Manhattan Institute said in a statement.
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There were protections put in place under the ACA aimed at mitigating the effect of mass cancellations. Section 1251 of the Affordable Care Act, which contains the "grandfather" provision, states that this provision was created to allow people to keep their existing plans that were purchased before the ACA was signed.
Those plans, however, must still meet certain requirements in order to be considered eligible for grandfathered status, including the need for the policy not to be changed after the ACA was signed.
Previous estimates showed that roughly two-thirds of small group plans, about 66 percent, could be canceled by 2013, according to the Federal Register. That number did not include 45 percent of large employer plans that could be axed as well.
Those cancellations are in addition to the other 25 million people who, according to the CBO, have "non-group and other" forms of insurance, meaning they are participants in the individual market.
Within the individual market, President Obama's administration previously projected that "40 to 67 percent" of polices purchased on the individual market would lose their "grandfather status" as well.
Health experts said this number was attributable to the fact that the individual market experiences a high level of turnover. Under the ACA, plans purchased after March 23, 2010 do not benefit from the grandfather clause and would lose their grandfather status should any part of the plans be changed for whatever reason.
A recent analysis by the American Enterprise Institute, a conservative think tank, showed that up to 100 million small and large business policies-- from half to two-thirds of all U.S. small businesses-- would cancel policies or have to send workers onto the heath care exchanges.
