Skip to comments.Insurers: At least 20% of new ObamaCare sign-ups failed to pay their first premium on time
Posted on 02/14/2014 10:20:45 PM PST by 2ndDivisionVet
So Bob Laszewski was right. Fully one-fifth of the new enrollment numbers that HHS has been waving around are bogus. Their target for the end of January was 4.4 million sign-ups; a few days ago, they told the country theyd made it three-quarters of the way there with 3.3 million. In reality, once the deadbeats are bounced from the rolls by their new insurers, theyll be in the ballpark of 2.6 million, or 60 percent of their target. And thats after HHS pressured insurers to extend the payment deadline from December 31 into January, hoping that a little more time for slackers would pad the enrollment figures even more.
Is it only 20 percent who havent paid, though, or is the actual number even bigger? The Times is guesstimating based on what theyre being told by different insurers, but read down into the piece and youll see that the biggest companies are seeing payment rates below 80 percent another detail flagged by Laszewski when he wrote about this a few days ago. Eighty percent is probably the best-case scenario:
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
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 months 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
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.
Whats the actual payment rate? If its 70 percent rather than 80, then suddenly were very close to HHS being only halfway to their 4.4 million target at this point.
At least one insurer has now extended the December 31 deadline for premiums to February 15 to delay having to cull their new ObamaCare-friendly consumer base for as long as possible. Note this bit too:
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.
In other words, John Smith signs up for Aetnas coverage on Healthcare.gov but waits before paying his first premium; then he sees a cheaper plan at Humana and signs up directly with that company, making his first payment on time. Hes paid up but hes still on the books at Aetna as a deadbeat. Or maybe he signs up for a different Aetna plan than he originally chose, leaving him with two separate accounts at Aetna and paid up on only one of them. However you slice it, there are bogus enrollments being counted by HHS that are going to end up being canceled soon. How many?
Heres another data point from my pal Karl. Ask the state exchanges what sort of payment rates theyre seeing and some will tell you its a lot lower than 80 percent:
Washington and Wisconsin have reported that barely half of those signing up submitted payments. But the paying portion is 66% in Nevada, 80% in Vermont and 85% in Rhode Island.
Even if 85% were the national average, though, it would still cut ObamaCares paid enrollment by a half million to 2.8 million vs. a March 31 goal of 7 million.
Its possible that paid enrollees represent an even costlier patient population than the updated national sign-up figures suggest.
That last bit is an excellent point. If you had to guess what sort of enrollee would be scrupulous about getting his first premium in on time, what would you guess? Would it be the young healthy who signed up on Healthcare.gov in December to keep his options open but whos ambivalent about popping for coverage this year because hes not earning much? Or would it be someone who knows theyll need expensive medical treatment this year and wants to be absolutely certain that their coverage is in effect? In other words, not only are insurers going to have to thin their risk-pool herd for nonpayment, but it may be that young adults the most prized of all enrollees are a disproportionately large segment among the deadbeats. Which means the looming adverse selection problem is about to get worse, not better.
Oh, and by the way: The website still isnt working for some people. Thus concludes HHSs week of enrollment glory.
And then, of those that paid, how many are actually in legitimate policies, and how many have botched enrolments and have just made payments on a non-existent policy?
I should add that I read somewhere else that a lot of these plans are “platinum” and are therefore unlikely to be “young healthies”, who would be wasting money on such comprehensive coverage; these are almost certainly mostly older and/or sicker enrollees who are about to sock the system with extensive and costly claims for treatment of those “pre-existing conditions” they couldn’t get treated before.
This law is like a turd that won’t flush.
I’ll point this out....all of this has an effect on the ongoing review by insurance companies for the mid-summer 2014 rate adjustment for January of 2015. If they reach an opinion that a thirty-percent rate adjustment is necessary...it’ll shock everyone this summer as the new rates come out for 2015.
The news media seems to think that the crisis period is over...but it gets into a more dire situation as they figure how badly they guessed at the right rate, and how few signed up and actually paid. It’ll be a shocker as folks get the rate news in July and start to figure their budget game for next year. Another thousand off the family budget? Can most folks find another thousand bucks just sitting around? Increase your deductible to get a lower monthly rate, then try to avoid going to the hospital at all?
when the numbers look bad for government multiply it by 4-10 to get the REAL numbers..
“Poor” people not paying their bills. Expecting others to pay. Who’d a thunk it!
Adam Smith's invisible hand working like clockwork....people are smart...gobmints are dumb.
“...not paying their bills.”
Bills? Those letters I get are just all the junk paper work telling me how much my deductible pays for, what the doctors asked and what the insurance paid, etc. I don’t even look at all of that crap, especially now that Mr. Obama is paying for it all.
People aren’t yet such sheeple that they won’t shop.
Even yet, being able to get into a premium plan means being able to pay for it, of course. The deep poverty set is still frozen out. Obamacare attempts to wrestle Jello, or something like that.
Quite possible. This thing has been portrayed as such a pot of jam that people could be practically pardoned for being misled.
Actually I would have expected that number to be higher than 20 percent.
More likely it is people signing up for plans, finding that they have to actually pay for the plans, saying BS on that, and staying uninsured.
Like shopping on-line, going to checkout, seeing how much items in your cart cost plus shipping and any taxes, then decide it is too expensive right now, leave the site and never empty your cart.
A business would never count this as a sale. A desperate for credibility government program counts it as a done deal.
The 20% figure is a fraud.....that’s the number the administration is floating. Strange how they can’t find out anything else about who’s signing up but they know unequivocally that 20% haven’t paid. When these bastards say 20% just double that and you are at least in the ballpark!!
The number is likely not nicley round. You are correct in that the real number is greater, like 37% or maybe 41%
Absolutely correct: the website was just the alarm for approaching colossal incompetence. The website is the floating ice in the water, the actual insurance plans are the iceberg that the Titanic is bearing down on!!!!!!
Translation of “at least 20% haven’t paid”: At most, 20% have paid and about 20% of those cases have been lost in cyberland.
Yep. Sad sorry state of affairs.
I think it will turn out to be like any other shopping cart where an average of 70% of transactions are abandoned for one reason or another. That is an average. That number could be even higher on something like this where people just logged in to “see what their coverage would be” and were shocked to find out that the 1% wasn’t actually going to pay for the 99%
The parallel here is the idiotic subsidy and low qualification standards for first-time home buyers with low credit scores and no money for down payment.
What did we get? A housing market collapse, and with it the securitization market for RMBS paper.
Same thing is going to happen here, but with the medical insurance market and the medical services industry.
While the poor are mostly an economic drag, the efforts of do-gooders to “do something” about people who can’t manage money (or their lives) are worse than worthless.
Phantom enrollees is right!
Obama activists signing up any and all they can find......never ending to boost the numbers...and that’s not working either as people become aware THEY have to pay for what they believed was “Free”.