An Updated Look at the Paid/Unpaid Issue (UPDATED)

Hat Tip To: 
Crouching Pinky (Twitter), Uri Manor (Twitter)

OK, now that we're over the hump of the 3/31 "official" open enrollment deadline, it's time to take a look at the "But how many have PAID???" fuss again.

I've been trying to decide whether my "90% either Paid or Unpaid for Legitimate Reasons" rule of thumb seems valid, or whether I should bump it up...or down.

An article up in today's National Journal states that according to the Blue Cross Blue Shield Association, their Paid Enrollee figure is around 80 - 85%...for policies from October, November, December and the first half of January.

On the one hand, this is significant for two reasons: First, because the BCBSA is huge; I don't know their collective marketshare, but it's big (they include Anthem/WellPoint, the various Blue Cross companies such as Highmark, Regence and so forth). I dunno...maybe 30% or more of the market in total?

Secondly, according to the article, this specifically refers to policy premiums which are well past-due. That is, policies which started either January or February 1st. This does not apparently include more recent enrollments (those from late January, February or March):

One of the biggest players in Obamacare's exchanges says 15 to 20 percent of its new customers aren't paying their first premium—which means they're not actually covered.

The latest data come from the Blue Cross Blue Shield Association, whose members—known collectively as "Blues" plans—are participating in the exchanges in almost every state. Roughly 80 to 85 percent of people who selected a Blues plan through the exchanges went on to pay their first month's premium, a BCBSA spokeswoman said Wednesday.

The new statistics, particularly from such a large carrier, help define how many people are actually getting covered under the Affordable Care Act.

The Blues' experience is in line with anecdotal estimates from other insurance executives, who indicated earlier in the enrollment process that they received payments from about 80 percent of people who selected their plans.*

The Blues' latest estimate includes policies that took effect Feb. 1 or earlier, the spokeswoman said.

This all suggests that I should lower the "Paid/Eventually Paid" estimate from 90% down to 85%, which would smart.

However, there's also the other side of the coin: As large as the BCBSA is, they still aren't the only major player in town. Just yesterday, Peter Lee of CoveredCA stated that California's total paid enrollment rate--which appears to include the hundreds of thousands of people who enrolled within the past month or so, from heavy hitters such as Kaiser Permanente--is 87%.

On Monday, Peter Lee, executive director of Covered California said 87 percent of enrollees had paid their premium.

If 87% of the total enrollees in California (which has almost 20% of all enrollments all by itself) have been paid, including the April- and May-start policies, I think it's safe to say that a minimum of 95% of these policies either are paid up or will be paid up by the point that they're due.

And, as I've discussed before, there's still the "insurance company took forever to bill me / payment was sent but it was lost by the insurance company's billing system" issue as well.

All of this suggests that my 90% estimate should be raised to around 95%.

So, combine the two: A family of companies representing perhaps 30% of the national enrollments, vs. another collection of companies representing around 20% of the national total, and it seems to me that my "90% Either Paid or Unpaid for Legitimate Reasons" rule is...pretty much dead-on target.

What do you guys think? 

UPDATE: Thanks to Uri Manor for finding another article referring to the same Blue Cross Assn. report, which clarifies:

The estimate, released by the Chicago-based Blue Cross Blue Shield Association, reflects enrollment activity among 35 Blue Cross Blue Shield plans in 47 of the 50 states, including plans sold by WellPoint Inc, from October 1 through February 1.

Ah hah!!

OK, so the National Journal article doesn't have it quite right--the 80-85% rate includes policies sold through February 1st, not ones that take effect February 1st.

This is significant because any policies sold between January 16 - February 1st didn't go into effect until March 1st, not February 1st.

Don't get me wrong, it's still a month later, and March-start enrollees should have all paid up by now (assuming they received the bill earlier, etc)...but this changes everything. Some insurance company billing systems send invoices out later. Some auto-pay systems are set up for automatic withdrawl on the last of the month, not the first.

The total QHPs sold on the exchanges as of 02/01 was 3.3M nearly on the nose. The total sold as of 12/28 was 2.15M, so about 1.15M were sold in between. That means roughly 575,000 were sold between 1/16 - 2/01, or about 17.4% of the total.

This is very close to the Vermont case, where about 18.2% of the Jan/Feb/Mar total were March-starts...(although that included 2/02 - 2/15 enrollments as well).

If the ratios here are a similar pattern, it's more like: January starts: 95% paid; February starts: 90% paid; March starts: 75% paid, or thereabouts. Average them out and you'd get around 85% of the total paid.

That being the case, I'd say I'm on very solid ground keeping my "90% rule" in place...or even bumping it up a notch to 92% or so.