Robert Pear of the New York Times has an important story today on the actual, as opposed to heavily-spun, state of play with Obamacare take-up. One of the obvious issues is that the Administration is desperate to show that its giveaway to the medical-industrial complex is going over well with the too-dumb-to-figure-out-they-are-being-fleeced public. How many people who get insurance that were previously uninsured is a critical indicator of success.
But useful numbers have been astonishingly hard to come by. Obamacare “sign-ups” now total 3.3 million at the end of January. A Bloomberg article from Wednesday points out key gaps:
How many people turning to the health insurance exchanges had been uninsured before? Officials say they don’t yet have data on how many people signing up were previously uninsured, or how many had insurance that they lost when plans were canceled. We also don’t know how many previously uninsured people bought health plans off the exchanges. The Gallup data do suggest that the overall portion of Americans going without health insurance is declining as Obamacare kicks in, but we don’t have official numbers or much insight into the actual increase in insurance coverage.
How many people have paid their premiums? The White House is reporting numbers on how many people have enrolled in coverage on the exchanges, but not how many have paid for it. People won’t have coverage if they don’t pay their bills.
In other words, the gross number of people who obtain new Obamacare policies contains some churn, potentially a lot of churn. Source include companies curtailing or repricing their own policies so much as to force employees into the individual insurance market (many companies are doing this opportunistically and choosing to blame the Affordable Care Act). We also have the individual policy cancellations which were supposed to have been reversed (not sure whether or how this was accomplished; in any event, execution was stayed at best for one year). There also are some cases where people in the individual market did find what they thought was better coverage in Obamacare policies, but from what we can tell, these cases are far less common that the Administration would have you believe.
The New York Times story flags a second issue: that the “enrollments” number has a lot of what Wall Street would call air in the marks. A policy has not been sold until the customer has sent in the first premium. CNN reported on January 30 that its canvassing of insurers suggested that 20% of enrollees weren’t sending in their first payment, with estimates ranging from 18% to 30%. And one insurer expected this level of attrition:
CoOportunity Health said about 18% of the 11,000 Nebraska and Iowa residents who had signed up missed its Jan. 24 payment deadline and would receive cancellation notices this week. But even this final notice told recipients to call if they had intended to pay the premium.
The insurer had projected up to 20% wouldn’t activate their enrollment.
“We figure either those people had a change of heart or thought it was too expensive,” said Cliff Gold, CoOportunity’s chief operating officer. “Or maybe some people decided to keep what they had.”
The New York Times story, based on a more recent tally, confirms the CNN account. If anything, the average is likely to be a bit lower than 80% making payments, since the insurers that had lower payment rates typically had more Obamacare enrollees than the ones that had more success in converting enrollments to payments. Key extracts:
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…
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…
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….
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….
Local and regional health plans are sometimes more effective in contacting consumers.
Elizabeth A. W. Williams….said…“we have received payment from… 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.
Now it’s possible given all the difficulties with navigating the healthcare.gov site that some of their non-payers had duplicate accounts and thus are insured (as in they paid on one policy somewhere) but had duplicate (or even triplicate) enrollments that are being flushed out of the system. But presumably later enrollments won’t be subject to as much of this sort of confusion, so failures to pay will be the result of reconsideration or possibly difficulty in making the payments.
The New York Times and CNN stories are important reminders that the public can’t take the widely touted headline numbers on Obamacare at face value. It will take some time and a fair bit of analysis to assess how much progress, if any, has been made on one of the program’s key goals, which is reducing the number of uninsured. It may turn out that whatever success is achieved on that front will be primarily through expanded Medicaid rather than the cumbersome, inequitable, and overpriced private insurance plans. That would be no surprise to single-payer advocates.