- Posted February 14, 2014 by
One-Fifth of New Enrollees Under Health Care Law Fail to Pay First Premium
WASHINGTON — One in five people who signed up for health insurance under the new health care law failed to pay their premiums on time and therefore did not receive coverage in January, insurance companies and industry experts say.
Paying the first month’s premium is the final step in completing an enrollment. Under federal rules, people must pay the initial premium to have coverage take effect. In view of the chaotic debut of the federal marketplace and many state exchanges, the White House urged insurers to give people more time, and many agreed to do so. But, insurers said, some people missed even the extended deadlines.
Lindy Wagner, a spokeswoman for Blue Shield of California, said that 80 percent of those who signed up for its plans had paid by the due date, Jan. 15. Blue Shield has about 30 percent of the exchange market in the state.
Matthew N. Wiggin, a spokesman for Aetna, said that about 70 percent of people who signed up for its health plans paid their premiums. For Aetna policies taking effect on Jan. 1, the deadline for payment was Jan. 14, and for products sold by Coventry Health Care, which is now part of Aetna, the deadline was Jan. 17.
Mark T. Bertolini, the chief executive of Aetna, said last week that the company had 135,000 “paid members,” out of 200,000 who began to enroll through the exchanges. “I think people are enrolling in multiple places,” he said in a conference call. “They are shopping. And what happens is that they never really get back on HealthCare.gov to disenroll from plans they prior enrolled in.”
Kristin E. Binns, a vice president of WellPoint, said that 76 percent of people selecting its health plans on an exchange had paid their share of the first month’s premium by the due date of Jan. 31. The company had received more than 500,000 applications for individual coverage through the exchanges in 14 states, she said.
Julie Bataille, a spokeswoman for the Centers for Medicare and Medicaid Services, which runs the federal exchange and supervises state marketplaces, said the government did not know how many people had paid their premiums and thus “effectuated” coverage. But in interviews and in the quarterly reports on their financial performance, insurers provided data indicating that four-fifths of applicants had met payment deadlines.
One big company, Humana, said it had received 200,000 applications for insurance through the exchanges. “About 75 percent of the people paid, and 25 percent did not pay,” said Thomas T. Noland Jr., a senior vice president there. Customers had until Jan. 31 to pay for coverage that took effect on Jan. 1.
Greg Thompson, a spokesman for the Health Care Service Corporation, which offers Blue Cross and Blue Shield plans in Illinois, Texas and three other states, said that “around 80 percent” of people choosing those plans had paid their first month’s premium by the Jan. 30 due date.
Local and regional health plans are sometimes more effective in contacting consumers.
Elizabeth A. W. Williams, spokeswoman for Independence Blue Cross, in Philadelphia, said the company had extended the payment deadline to Jan. 28, then extended it again to Feb. 15 and made many phone calls urging people to pay.
“As a result,” Ms. Williams said, “we have received payment from 84 percent of our customers who purchased Independence Blue Cross health plans on HealthCare.gov — 84 percent of the 27,528 people who enrolled through the federal marketplace in Independence Blue Cross health plans with coverage effective Jan. 1.”
Scott Keefer, a vice president of Blue Cross and Blue Shield of Minnesota, said that 95 percent of people who signed up for coverage starting on Jan. 1 had paid premiums by the deadline of Jan. 10. The company, he said, made aggressive efforts to contact consumers and remind them that they needed to pay.
That effort was feasible, he said, because the Minnesota exchange’s website had problems that kept enrollment well below expectations. The federal government reported this week that fewer than 30,000 people had signed up for private health plans on the Minnesota exchange from October through January. Blue Cross and Blue Shield had one-quarter of the market.
People could have many reasons for not paying their premiums. Some decided they did not want a health plan for which they had applied. Some never received an invoice from the insurance company, or received it late. In addition, phone lines of some health plans were overwhelmed.
Obama administration officials said they did not know how many people signing up for coverage had paid their premiums because the government had not finished building the “back end” of the computer systems needed to pay insurers.