Obamacare

Insurers Testify that 10-20 Percent of Obamacare Sign-Ups Haven't Paid, Some Are Duplicates

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Whitehouse.gov

Since last fall, when Obamacare's exchanges opened for business, the Obama administration has been releasing enrollment reports that don't actually count enrollments. Instead, they count sign-ups—the number of people who have "selected a plan" through the law's health insurance exchanges. Those people may or may not have paid their first month's premium. If they haven't, and don't, then they are never enrolled.

So how many aren't paying up? Since January, multiple reports based on insurance industry sources have warned that roughly one in five, or twenty percent, of people who sign up for plans are not following through with payment. Health and Human Services Secretary Kathleen Sebelius has said that somewhere in the range of 80 to 90 percent of sign-ups resulted in an activating payment, but the Obama administration has not yet provided any official figures. When asked about payment rates, officials have suggested that the information was in the hands of insurers, and that interested parties should direct inquiries toward them.

That's exactly what Republicans on the House Energy & Commerce Committee did. In April, the committee surveyed all of the insurers participating in the federal exchange, which covers 36 states, and last week released a report saying that just 67 percent of sign-ups had paid for the first month.

As I noted at the time, there were some problems with the report. It ignored some of the bigger states that are running their own exchanges, like California and New York, and, more importantly, it reported a payment figure that was current as of April 15—despite the fact that a big chunk of the sign-ups were not required to pay until the first week of May, when their coverage went into effect. Some of those people hadn't paid, but they hadn't blown a deadline either.

Today, the Energy & Commerce Committee is holding a hearing following up on the non-payment issue featuring testimony from health insurers. And, based on early testimony and news reports, most of what insurers will say is essentially what we already know: that last week's Energy & Commerce report wasn't a reliable guide to how many people will end up paying, and that the actual non-payment rate is somewhere between 80 and 90 percent, depending on the plan and the region.

Via Bloomberg:

As many as 90 percent of WellPoint customers have paid their first premium by its due date, according to testimony the company prepared for a congressional hearing today. For Aetna, the payment is in the "low to mid-80 percent range," the company said in its own testimony. Health Care Service Corp., which operates Blue Cross Blue Shield plans in five states including Texas, said that number is at least 83 percent.

That's two insurers who peg their payment rates in the low 80s, and another that says it's as much as 90 percent in some places, which means that in total it's somewhat less than 90 percent. This means that the payment rate, overall, is likely somewhere in the mid 80s, which more or less matches what Karen Ignani, the head of America's Health Insurance Plans (AHIP), the major insurance industry trade group, has already said. It also fits with the 85-percent paid estimate we've heard from officials in California.

Liberals are already crowing about the industry because it proves the GOP report wrong. The House GOP botched this one, I think, but today's testimonies leave us mostly back where we started, with a rather significant downward correction on the way.

A fifteen percent reduction from the 8 million sign-ups the administration reports means cutting total enrollment by 1.2 million people, dropping actual enrollment to about 6.8 million. That's pretty close to the Congressional Budget Office's (CBO) original projection of 7 million exchange sign-ups, and it's higher than the CBO's revised projection of 6 million sign-ups, but it's not a small cut. Even if the reduction is somewhat smaller—say, 12 percent, that's still nearly a million enrollments chopped off the administration's sign-up total.

And, of course, it's also still possible that the reduction is somewhat larger, say 15 or 20 percent. The New York Times report on today's testimony still puts total payments at around 80 percent in its opening paragraph, which would mean an even bigger drop.

The Times report also flags an item from AHIP's prepared testimony noting "many duplicate enrollments" in the system. Because of the botched launch of the exchanges, some shoppers ended up enrolling twice. "As a result," the AHIP testimony says, "insurers have many duplicate enrollments in their system for which they never received any payment. In cases where an insurer has a new enrollment for a consumer who previously enrolled, they are not expecting that original policy to be effectuated—even though that data is still reported."

How big a problem will the duplicates turn out to be? AHIP doesn't offer any guesses. It's possible that it won't be a major issue at all; last fall, when the federal exchange system was essentially unusable, we heard about Obamacare "orphans" stuck in the system. This turned out to be a real problem, but not on a massive scale. About 13,000 people were affected. On the other hand, the issue is big enough that AHIP felt it necessary to mention in hot-button congressional testimony.

So here's where we're at on the sign-up issue: The House GOP report was too early, ignored deadline issues, and turned out to be problematic as a result. But based on insurer testimony, the administration's much-touted total of 8 million sign-ups is likely to be reduced by a million or more when converted into paid enrollments. In other words, the administration's figures were too rosy by quite a bit—just not as much as House Republicans suggested. 

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  1. So, net, has O-care reduced the number without medical insurance by any amount we can reliably count?
    If so, what has been the cost to the taxpayer? What has been the cost to those who had insurance?
    IOWs, is there any reason Pelosi et al shouldn’t be forced to pay for the entire disaster out of their own pockets?

  2. It doesn’t matter! It doesn’t matter if 12M people have signed up. It doesn’t matter if 100M people have signed up and payed. Paying insurance premiums has no correlative effect to health outcomes. What matters is whether these people will be able to afford to continue paying, whether they are able to get access to healthcare with the insurance they bought, and whether they will be able to afford their part of the claims once the get access. Please, please, please, Peter, don’t engage them in the shell game.

    1. What matters is whether these people will be able to afford to continue paying…

      Yes, this. I will like to see the figure of current, paid enrollees sometime after the November election. Let’s make it February 2015.

    2. This could be phrased better.
      What matters is whether these people will be able to afford to continue paying long enough to get any access, whether they are able to get effective access to healthcare with the insurance they bought, and whether they will be able to afford their part of the claims once they get access.

      1. In some instances they aren’t going to get any access unless they put up a deposit for their part of the bill first. This has happened to at least one acquaintance of ours who recently had knee surgery – third one to the same knee in two years. She had to pay part of her share in advance for use of the operating room, so I’m told.

        1. This is completely true. I had a procedure done, and the day of, they wanted me to pay $2,000 which seemed steep.

          Then when the procedure was finished, I found out that was just a deposit.

          Funnily enough, the actual cost was far below $2,000 more like $500.

          So, they must have wanted more in case something went wrong.

          Kind of cheesy.

  3. OT:

    I know that the majority of politicians are slimeballs, but some are slimier than others:

    Slimier than your average slimey

    1. Awesome. Charlie is the type of dude who would pimp his mother if it was a net vote-getter. Anything that comes out of his mouth is in the interest of making Charlie look good. Why in the hell the Florida Democrats would trust him enough to back him for governor is beyond me. Charlie isn’t gonna owe them shit, and his promises carry about the same amount of weight as Obama’s.

      1. Crist is tremendously unpopular and even more distrusted. Scott’s getting a second term, despite his own unpopularity.

    2. So he lost to a Latin guy because Republicans are racists!

      1. Dude, that wasn’t a REAL Latin guy, he was one of those damn Cubans. They’re all white racists down there.

    3. In a state where voters are close to 50% Dems and 50% Repubs, it’s probably a bad idea to characterize half of the voters as racists.
      Maybe he thinks this will mobilize Dems to come out and vote for him. Is Crist so out of touch that he doesn’t realize this tired tactic has been overused and lost it’s effectiveness?

  4. I guess the left will take what victories it can get at this point. They were wrong about the demographic composition of those who would be covered (potentially fatally so; do recall the discussion about the ‘death spiral’ that would result with too few ‘young invincibles’), wrong about the timeline, and are holding extremely tight control of information — indicating that they know about as much (or as little) as anyone, and are making very careful statements about it to manage expectations. That enrollment numbers are where they guesstimated is frankly coincidence, not part of a master plan made by our better-informed masters.

    I do not believe that this will change much in the short term. People are still pissed at losing their healthcare, the changes made by ObamaCare, and the incompetence surrounding the rollout. I was taken by surprise at how botched the rollout has been, but otherwise it’s going about as poorly as we all thought — too few healthy people roped into the scheme, and too many people who will be net subsidy recipients.

    1. Oh yeah! Well…. 8 million! Take that, bagger!

  5. After catching the O’s admin lying their asses off about…well, everything else, why would we believe anything that comes out of their mouths about Ocare? Further, knowing that they lied their asses off about other aspects of Ocare, why would we believe any of the numbers they are giving us now?

    I have come to the conclusion that the safe bet is to go with the opposite of what they say.

    Once you catch someone lying, you know they are a liar. You can’t believe anything they say. These people are fucking liars.

    Ocare is unconstitutional and a disaster of epic proportions. It is building up to be one of the biggest disasters in our history.

    Speaking of socialized medicine, I see where the V.A. has investigated itself and found no evidence of wrong doing. There is a surprise.

    1. There is a surprise.

      Surely, that must be sarcasm?

  6. The House GOP botched this one

    There is only one Trey Gowdy.

  7. I was in a meeting a couple of days ago with a client about a major upgrade we’re doing for a system. I was going through some templates with the group, and someone commented on a set of icons that I was using for the newest template. She said ‘Oh, I really like those icons!’ Someone else agreed, and then the entire group joined in ‘Oh yeah, I like those too!’.

    I don’t know why, but my innner sarcasm took over, and I said in a very slow and deliberate tone: ‘Ok. If you like your icons … you can keep your icons’. This was followed by one subdued chuckle and dead silence. Keep in mind, most of the people at that table are die hard ‘liberals’, and I have no doubt, Obama supporters.

    Well, at least, I got a good laugh out of it.

    1. Careful, dude. Obama supporters can be very irrational. We don’t want you to lose your job.

      1. I’m not worried about losing the job. Hence, the indifference. I do stuff like that occasionally. They know I’m a radical anarchist. They might not like it, but they do put up with it.

        Although, I have to say, I was in a meeting once with the 2 of them who are most likely to have the power to get rid of me if they wanted to, and one of them said something like ‘Hey, this isn’t the most PC thing to say, but so and so is stupid!’ And the other said ‘We don’t give a fuck about PC in my department.’ So there is that.

        1. Glad to hear it.

        2. Wow. That sounds like a project team that might actually produce results!

  8. How hard is it for anyone, either in the administration, or from the insurers, to give us two numbers- bills sent out, premiums paid? Everyone in this entire charade keeps using percentages. Is the 80-90% applied to the 8.1 million number, or isn’t it? Can anyone actually answer this question definitively?????

    1. Before or after the 30 day grace period expires for late payments? Keep in mind millions of payments were due May 1 and we are only a week past the initial due date.

      1. So next month really accurate numbers, right?

      2. I would settle for any damned absolute numbers at this point! Surely, someone could give a number of the premiums past-due for any point in the past vs bills sent out. This constant referring to percentages leaves out any context to judge the success.

        One of my issues is that the House report showed a discrepancy when it claimed 2.45 million was 67% of policies billed for in the federal exchange, but as many pointed out, this means that 3.7 million were billed for- a number significantly below the “selected a plan” number put out by HHS. One explanation for this is that not everyone counted by HHS checked out the plan selected, and thus will never receive a bill (the status of my account, by the way). My suspicion is that the 80-90% number being put out by the insurers only applies to the people who actually checked out, which means the 80-90% number should be applied a number lower than the 8.1 million.

        1. But…but…THERE ARE NO ABSOLUTES in this world, Yancey! Absolutely!

        2. I never used the website, but perhaps it would be useful to see if there is stage where you select a plan, and then another stage where you confirm it.

          Is it just like Amazon where you select a product and then confirm you wish to check-out?

          Or is it like one-click Amazon where once you click a plan, its selected and checked out.

          I’d imagine it is select, then check-out, because one-click on insurance seems a bit hasty.

        3. I work with data all day long. Constantly pulling ad-hoc reports for the company. Just have those insurance companies grant me access to their databases and I’ll give you all the number s you need. 50 states.. A dozen companies in each state? might take me a week, but I’ll get them.

          SELECT count(1) FROM data_table WHERE is_paid_field = ‘Y’;

      3. Seems like a week is plenty of time to run a few queries on current payment status.

        Of course HHS has repeatedly said there’s no such reporting capability. I assumed they were lying, because no one could actually be that incompetent. Perhaps I underestimated them.

    2. Note that, AFAIK, the back end of Healthcare.gov is still not finished. They may not know because they are basically counting things by hand and making estimates.

      There were stories back in January predicting disaster if they didn’t have it done by March. The only follow-ups I’ve seen say that they have figured out ways around the problem.

      1. …”The only follow-ups I’ve seen say that they have figured out ways around the problem.”

        The SEIU approves of this message.

        1. No kidding. For example, there seems to be (so far) no automated mechanism for anyone to modify their plan. So if they (e.g.) have a baby, they have to fax in a form and someone manually makes the change.

      2. Jesus Christ, seriously?

        If the back-end system is still not finished by now then I don’t think it ever really will be. Every horrible, corrupt, and stupid expediency allowed in the manual process will be frozen in carbonite until the very end. Veteran’s Administration Part II: The Purge.

  9. only ten to twenty percent fallout in the first month? how about the second and third months?

  10. actual non-payment rate is somewhere between 80 and 90 percent

    I think you meant to say “payment rate”.

  11. How many dead people did Obama’s followers sign up?

  12. You’re conclusion is ridiculous, Peter. Everyone knew from the very beginning that total enrollment based on paying was going to reduce the actual number. And 10%, even 15%, is well within expectations for a whole host of reasons…including getting insurance through a new found job. In fact, you quoted Sibelius just a few weeks ago saying the number was going to be between 10% and 20%. Yet, it was you who highlighted that bogus GOP report, and then wondered why the White House didn’t release a number even after they told you it was the insurance companies who had it.

    1. “REMAIN CALM, ALL IS WELL”

      1. Good advice.

    2. “Everyone knew from the very beginning that total enrollment based on paying was going to reduce the actual number.”

      Then why did the Obama administration tout the 8 million figure? If the duplicate enrollment number is more significant, then ACA may have enrolled only 6,7 million.

      How many Americans were uninsured most of their lives but miraculously found a new job that pays for your healthcare Conveniently right around the end of April or beginning of May?

      The ACA is already short on young healthy people in the pool. If most of the enrollees are sick or have preexising conditions, even a 10% non payment rate will start to hurt. Insurers have to pay for 11 essential benefits, and if I recall correctly, there’s grace period in which they have to cover treatments even if the customers don’t make the first payment.

      And the rate hike is just around the corner.

      1. Because the 8M figure is meaningful in its own right…its a demonstration of the number of people who were interested in gaining insurance, or in getting it cheaper, and who ultimately turned to the ACA. It was a market place that interested them. It never was the final number, and as I said above, even Sibelius noted that a few weeks ago.

        Here is the problem for Peter…he had a need for the number of non-payers to be significant, and so far is not. All those insurance companies listed above said they are fine with the number of non-payers that they are experiencing.

        You and Peter are running out of “ifs.”

        1. All those insurance companies listed above said they are fine with the number of non-payers that they are experiencing.

          Maybe that’s because the government will bail them out. Not only do Obamacare enrollees get subsidies and Medicaid, insurance companies get their free stuff too!!!

        2. You’re getting as bad as Tony, repeating the same crap without ever responding meaningfully to the criticisms that are presented here.

          After getting a bunch of policies cancelled, after changing the rules of insurance to raise costs all over the place, and after threatening people with a tax hike if they didn’t sign up, you get 8 million (vs a target population of 40 million) to visit a fucking website.

          Why are you hitching your wagon to this? There’s nothing here to like. If you want single-payer, then advocate that and stop carrying water for this monstrosity.

          1. Just to be clear, it wasn’t 8M who simply visited the website…that number would be larger. It was 8M who enrolled, and what looks like will turn out to be about 7M who have paid.

            And out of those uninsured (40M), that number has been dropping, ever since enrollment began, even according to right leaning Gallup:

            http://www.gallup.com/poll/168…..drops.aspx

            I did want single payer…to be honest, I thought it was the only way to reduce health care costs. As a small business owner, I watched my insurance premiums go up constantly for decades. Again, to be honest, I don’t thing the ACA will reduce health costs all that much.

            But I know this…what we had before was untenable.

            1. Why do I have to depend on a polling outfit (and how is it “right leaning”, does it poll a representative sample of the public or not?) to tell me the self-reported numbers (of a now-illegal act) when the administration should have all the accurate information already available?

            2. As a small business owner, I watched my insurance premiums go up constantly for decades.

              Did you miss the part yesterday where I pointed out all the ways in which the government fucked up healthcare and insurance before the ACA? Why didn’t we just repeal those things? “Something” had to be done, right?

              Also, there’s this thing called inflation, it affects prices across the board. You may have noticed a slight increase in your grocery bill since the 1980s too.

              1. You have no chance at repealing Medicare. None. And now, IMHO, you probably have only a slightly better chance at ever repealing the ACA. The best you can probably do is improve it, maybe pay for it differently. Again, just my opinion.

                Inflation was NEVER the cause of the increase in health premiums. The rise was dramatic every single year. As a fixed cost, whenever I did my budgeting, it was exploding into my profits. And the increase never varied…not in any single year. And for that, we had about 40M uninsured, the highest cost for health care in any developed nation coupled with outcomes that were inferior to many of those nations with less cost.

                Its for those reasons that I said what we had was untenable. By the way, as a small business owner, I never could understand why this country ever wanted business to be saddled with health care.

                Maybe Libertarians have a better idea. I’d listen. The problem is you need to win elections. I knew the GOP would do nothing to change the trajectory, and I remain optimistic the ACA will.

                Again, just my opinion. Peace.

                1. You could save yourself and the rest of us a lot of trouble by just admitting that you don’t read what people write in response to you. I never mentioned Medicare. I was talking about HMO, EMTALA, and HIPAA, among others. I also talked about the role of other agencies like the USDA, FDA, and DEA in reducing health outcomes.

                  Your opinion on the solution is worthless if you don’t even understand the problem.

                  1. Then I’ve got a suggestion for you…don’t read my comments. You won’t have “trouble,” and you’ll keep your blood pressure down.

                    1. This isn’t your personal blog. By posting to a comments thread, you are implying that you wish to engage in some sort of debate, although I suppose to you shit-flinging is a form of debate.

                    2. Then read on.

                    3. But you read on at your own peril. Don’t complain about your time being wasted, and going through trouble.

        3. “Because the 8M figure is meaningful in its own right…its a demonstration of the number of people who were interested in gaining insurance, or in getting it cheaper, and who ultimately turned to the ACA. ”

          As if they had any choice. The number doesn’t demonstrate “interest” so much as “helpless despair”.

  13. “the actual non-payment rate is somewhere between 80 and 90 percent, depending on the plan and the region.”

    You mean “payment rate”.

    1. I wouldn’t be so sure. Have you seen this administration do anything productive in five years ?

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