NY Times Supports My Conclusions: 80% of Jan-start Enrollees Paid

Well how do you like that? Here I go and spend all morning crunching numbers, reviewing different state reports and so forth...and a few hours later the New York Times goes and makes my point for me:

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.

They go on to quote a bunch of actual insurance company executives, including biggies like Aetna, Blue Cross of California and WellPoint; the percentages vary, but the overall concensus seems to indicate roughly 80% of enrollees for coverage starting in January (basically, all enrollees through the end of December, though a few states extended this out to early January) have paid to date. No information is given for February-start policies (and March-start policies are irrelevant for now, as I noted earlier).

Now, when I posted my piece this morning, I noted that there are 3 important questions here: HOW MANY haven't paid yet; WHO hasn't paid yet (that is, what start-date...Jan, Feb or March?); and WHY haven't they paid?

Between my speculative number-crunching and this New York Times article, I'm estimating that the answer to the first question appears to be roughly 75% overall:

  • Around 80% of the 2.15 million January-start enrollees
  • Around 66% of the 1.28 million February-start enrollees
  • As noted above, the March-start percentage is utterly irrelevant until March

Average out these two ratios and you hit around 75%. The 80% figure seems to be on pretty solid ground. The 66% figure for the February-start enrollments is an educated guess on my part, but I've been accurate enough to be given the benefit of the doubt here, I think (my analysis of the Medicaid side has been a bit shakier, I admit). Besides, there's evidence here as well:

  • Vermont, for instance, just reported that 92% of their January-start enrollees have paid, while their February-start enrollees are up to 79% paid. Obviously Vermont is a bit of an outlier here, but even so, their 79:92 ratio would be around a 69:80 ratio, which is actually higher than my 66% guess.
  • California, meanwhile, reported 75% of their January-start enrollees had paid up as of January 22nd, so it seems reasonable to assume that a minimum of 66% of their February-start enrollees have paid up as of today.

OK, so now we've addressed the second question: Who hasn't paid yet; the answer appears to be around 430,000 of the January-start enrollees and another 380,000 of the February-start enrollees.

This brings us to the third question: WHY haven't they paid yet?

Earlier today I speculated about 4 possible reasons:

  1. Unpaid because it isn't due yet (insurance companies are used to last-minute payments)
  2. Unpaid because the insurance companies' own billing or notification systems are screwed up or backlogged
  3. Unpaid because the exchange billing/notification system is screwed up or backlogged
  4. Unpaid because the customers are deadbeats

I noted that of these, only the latter two are legitimate "attack" points on the law itself; the first two aren't. According to the NY Times article, I left out a fifth possible cause: Flat-out confusion about the process, the blame for which which I'd say should be split evenly between the customers, the private companies and the exchanges:

“I think people are enrolling in multiple places,” Mr. Bertolini said in a conference call with securities analysts. “They are shopping. And what happens is that they never really get back on HealthCare.gov to disenroll from plans they prior enrolled in.”...

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.

I also gave a final breakout of what I estimated the likely "cause of nonpayment" breakouts to be; I'm modifying that here:

  • 75% Fully Paid
  • 10% Unpaid because payment isn't even due yet (Feb/March-start dates) (NOT a legitimate attack point...yet)
  • 5% Unpaid due to internal Insurance Company technical/paperwork issues (NOT a legitimate attack point)
  • 5% Unpaid due to Exchange technical/paperwork issues (legitimate attack point)
  • 3% Unpaid due to Confusion about the Payment Process; shared responsibility between Companies, Exchanges & Customer (possible legitimate attack point)
  • 2% Unpaid due to Deadbeat/Procrastinating Customers (possible legitimate point...but what was the industry average for deadbeats pre-ACA?)

So, what does this all mean for the ACA Signups spreadsheet and graph? Well, here's what I'm going to do: For the 5 states which separate out their paid/unpaid numbers regularly, I'll continue to do so. For the other 45 states, I'll add an extra "90% Either Paid or Unpaid for Legitimate Reasons" cell, similar to my "Low-End Estimate" on the Medicaid side. And on the Graph itself, I'll add a similar marker until more solid numbers are released.

And with that. I'm done.