Study: Pre-Obamacare Health Insurance Was Better Quality Than Exchange Plans

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Individual health insurance policies were of higher quality in 2013, before Obamacare regulations hit, than the offerings on health-care exchanges this year, according to a study released Monday.

The National Center for Public Policy Research examined the health insurance plans available before the health care law took effect in ten major cities and found that for 27 year-olds and 57 year-old couples, the individual market used to provide more comprehensive coverage than the exchanges.

As is typically the case with Obamacare, young adults were the hardest hit. Last year, there was an average of 33 health insurance plans in each area studied that offered not only lower premiums than the least expensive Obamacare plans currently available, but also lower or equal deductibles and out-of-pocket costs.

Older adults have a similar experience. There’s an average of 10 policies per area that had lower premiums and deductibles last year, compared to the cheapest exchange offerings this year.

Cost isn’t the only factor, either. The study found that Obamacare exchanges are populated by more restrictive types of health insurance — significantly more so than the individual market was in 2013. (RELATED: Insurer: Obamacare Customers Must Break ‘Choice Habit’) 

Health maintenance organizations (HMOs) are generally the most restrictive type of provider network, where the insurance company doesn’t cover out-of-network providers at all, according to the study. Preferred provider organizations (PPOs), usually cover out-of-network providers, but require patients to pay higher cost-sharing for it, giving patients the widest range of options to choose their doctors.

While Obamacare exchanges have already become infamous for offering significantly narrower networks than are common in the individual and employer-based health insurance markets, the exchanges in these areas also have a higher proportion of more restrictive HMO plans, which don’t pay for any care outside the already-shrunken network. Obamacare exchanges had an average of 16 more HMO plans for both age groups.

The 2013 private individual market boasted 32 more less-restrictive PPO plans for 27 year-olds compared to Obamacare exchanges, and 25 more plans on average for 57 year-olds. (RELATED: Obamacare-Forced Narrow Networks Will Spread To The Whole Country, Expert Warns)

“When millions of people were losing their health insurance plans in late 2013, Obamacare supporters claimed those plans were of poor quality, calling them substandard and even ‘crappy,'” Dr. David Hogberg, the study’s author, said in a statement. “But they never provided any evidence to support those claims. Quite the contrary, this study shows that in important ways, the plans on the individual market in 2013 were of better quality than those on the Obamacare exchanges.” 

While Obamacare supporters have long charged that the health insurance industry was filled with “junk” insurance plans instead of quality plans, the market appears to have had quite a few advantages over the Affordable Care Act’s first year of offerings.

Either way, customers may be more satisfied with the lower-cost coverage they had before the health-care law. One Kaiser Family Foundation survey found customers were happier with plans that weren’t compliant with Obamacare regulations than they are with Obamacare-approved insurance plans. (RELATED: Survey: Customers More Satisfied With So-Called Junk Plans Than Obamacare Health Coverage)

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Sarah Hurtubise