The lingering question behind ObamaCare’s enrollment stats is how many people have paid their first month’s premium, and the numbers are starting to trickle out.
President Obama said Tuesday that 7.1 million Americans had selected plans on both state and federal exchanges through the end of open enrollment period. On Monday, Kathleen Sebelius, secretary of the Department of Health and Human Services, told a local Oklahoma television station that somewhere between 80% and 90% of enrollees had made their first premium payments.
The payment issue is key. Traditionally, the insurance industry doesn’t consider a person enrolled until they’ve paid.
The National Journal reported Thursday that between 1% and 20% of enrollees have not paid their premiums, according to the Blue Cross Blue Shield Association, whose members are participating on exchanges in nearly every state.
Nevada, which had its own insurance exchange for residents, reported on Wednesday that 62% of enrollees had paid for their plans so far.
On Thursday, the administration set a date of April 15 for the extension it announced last week for people who were unable to sign up for coverage on the federal exchange, Healthcare.gov, by March 31.
The ACA mandates every individual in the country have insurance by the end of open enrollment period, or they will be subject to a penalty of $95 a year or 1% of their annual income.
Devon Herrick, senior policy analyst at the National Center for Policy Analysis, says he is more inclined to believing the Blue Cross Blue Shield Association’s stats, as the data set is bigger than what is seen amongst individual states. Regardless, he says it will likely be a test for insurers in attempting to enroll those who selected plans but had not made a payment.
“I have heard that the people who are signing up more recently were more serious [about paying].But at the same time, we have heard that some of those who signed up early were gone and not coming back.”
Those who select plans may be holding off to decide whether or not they really need the care, and may opt to not pay. Insurers will eventually drop them Herrick warns, but it gets trickier if an enrollee pays their first month’s premium and then drops off. There is a 90-day grace period that insurance companies have to wait before they can remove an enrollee from their policy if they make their first payment and then fail to continue paying.
“Insurance companies can stop paying claims after one month, but they have to wait three months before they can kick a person off,” Herrick says. “There will be a lag time before we know who is actually gone. If the individual market from the past is any gauge, for new enrollees it’s not uncommon to have about one-fourth drop out throughout the year.”
But that being said, don’t expect HHS to revise its numbers down, he says.
“HHS was pushing hard to raise awareness and entice people to sign up. The goal was marketing and promotion, not to be accountants.”