FROM PROPUBLICA….. Editor’s Note: This post is adapted from
Ornstein’s “Healthy buzz” blog.
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Payment Due: The Obamacare
Deadline No One Is Talking About
by Charles Ornstein
ProPublica, Dec. 11, 2013, 10:42 a.m.
Analysts say that
excluding holidays, people enrolling in new health care plans by the Dec. 23
deadline have only a few days to pay their first premium. Missing the deadline
could create a coverage gap for those converting from an old plan to a new one,
or delay coverage for the uninsured.
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The U.S. Department
of Health and Human Services announced this morning that nearly 365,000
Americans had signed up for private health insurance under Obamacare.
The vast majority came from 14 states running their own insurance exchanges,
while 137,000 came by way of HealthCare.gov, the much-faulted federal Web site
that handles enrollment for the remaining states.
But amid the
rush to enroll as many people as possible by the Dec. 23 deadline, there’s a huge caveat that
isn’t getting much public attention: For coverage to take effect on Jan. 1,
enrollees must pay their first month’s premium on time. (The deadline varies
somewhat by state and by insurer.)
That’s slow
going, according to consultants and some insurers, raising the prospect that
actual enrollment will be far lower than the figures HHS is releasing.
“There is
also a lot of worrying going on over people making payments,” industry
consultant Robert Laszewski wrote in an email. “One
client reports only 15% have paid so far. It is still too early to know for
sure what this means, but we should expect some enrollment slippage come the
payment due date.”
Another
consultant Kip Piper, agreed. “So far I’m hearing from health plans that around
5% and 10% of consumers who have made it through the data transfer gauntlet
have paid first month’s premium and therefore truly enrolled,” he wrote me.
“It
naturally varies by insurer and will hopefully increase as we get close to end
of December and documents flow in the mail,” added Piper, a former official at
the Centers for Medicare and Medicaid Services. “But overall I’m hearing it’s a
small portion so far. And that, of course, is a fraction of an already
comparatively small number of people who have made it through setting up an
account, getting verified, subsidy eligibility determined, plan selected,
complete and correct data transferred to the insurer, and insurer set out the
confirmation with invoice for consumer’s share of the first month’s premium.”
Blue Shield
of California
said it has sent out thousands of payment request letters.
“Members do
not know they need to make their first month’s payment until they get this
letter. Payments are trickling in and while we expect an uptick over the next
week, members have until January 6 to make this payment,” spokeswoman Mia Campitelli wrote in an email.
California’s
deadline is later than most, and consumers need to
check for the deadline for the insurance plan they choose. Campitelli
said Blue Shield does not have a projection of what percentage of enrollees
will pay up by the deadline.
With
problems plaguing HealthCare.gov until the end of November, consumers don’t
have much time to pick plans. Some consumers, on the advice of federal
officials, have turned in paper applications — and those are still being
processed. That leaves little time to send invoices and process the first
month’s payment.
Ken Wood, a
senior adviser to Covered
California, the state’s exchange, said it is “too early to tell”
what would happen. “Remember that we have 11 different plans with 11 different
billing systems — some more flexible than others,” he wrote in an email.
“Excluding only Christmas Day and New Year’s Day, there are only eight business
days between the December 23rd cutoff for enrollment and the January 6th
deadline for payment.”
Wood said
the consequences of missing the first payment differs by person.
“The good
news for this first open enrollment is that missing a payment deadline just
rolls your effective date a month,” he wrote. “This is OK for the uninsured but
a potential concern for the insured who are rolling
over into a compliant plan since they will now have a gap in coverage.”
Covered California is promoting
“give the gift of health” where a grandparent or parent would pay for the
coverage with a debit or credit card. Some enrollees who receive
subsidies still have to pay $1 a month for their coverage, “oddly a real
billing and collection concern because it is easy to overlook,” Wood said, — so
Covered California
is encouraging them to pay $12 for the year and be finished. “The barriers to
paying the entire amount are the systems capability of the health insurers,”
Wood said.
New York’s
State of Health exchange does not have data on how many enrollees have paid
premiums, spokesman James O’Hare said. “In the event that an enrollee does not
pay his/her premium, coverage does not go into effect, and they will no longer
be enrolled in NY State of Health,”
he wrote in an email.
James
Stover, CEO of University of Arizona Health Plans, said he expects more than 85
percent of enrollees to pay the premium on time. “Right now we’re comfortable
with the process we have in place,” he said. “As soon as we get the information
in, we’re reaching out to the individuals to let them know what their binder
payment is. We’ll follow up with them.”
Stover said
that enrollment has been lower than expected. A couple of weeks ago, only one
person had signed up. By early this week, the figure had increased to 35. “We
plan to have triple digits in the next couple weeks and greater growth in the
next couple months. We initially expected to have somewhere between
5,000 to 6,000 by June 30, 2014.”
While saying
it is difficult to guess what will happen, Piper said he believes “a plan will
be lucky if half of applicants pay first month’s premium on time for January
coverage start but that perhaps three-quarters will pay in time for coverage
start by February or March.”
One
additional point to keep an eye on: If consumers pay their first month’s
premium but then stop paying, insurers cannot drop them from their plans for 90
days.
“Under the
rule interpreting the law, insurers offering plans on the exchanges must
provide a three-month grace period to individuals who have enrolled and who
have stopped paying their premiums. In the first 30 days, the insurer must
continue to pay incurred claims. But for subscribers who ultimately fail to pay
premiums within the 90 days and whose coverage is terminated, payers are not
required to pay for claims incurred during the last 60 days of the 90-day
period,” Modern Healthcare reported in August.
Healthcare
providers are nervous that they will be on the hook for services delivered to
patients who haven’t paid their premiums.
Editor’s
Note: This post is adapted from Ornstein’s “Healthy buzz” blog. Have you tried
signing up for health care coverage through the new exchanges? Help us cover
the Affordable Care Act by sharing your insurance story.
Like this story? Sign up for our daily newsletter to get more of our best work.
More coverage:
Obamacare and You