Checking in again on "But How Many Have Actually PAID???"

Hat Tip To: 

I discussed the "Paid/Unpaid" issue in the California update a few moments ago, but the topic needed a separate entry as well. According to the San Jose Mercury News, CA-exchange-based QHP enrollees who enrolled by January 31st are up to an 85% payment rate, from 80% as of 2/19:

The numbers of nonpayers varied only slightly among the largest insurers on the exchange: Kaiser Permanente reported that 13 percent of its enrollees didn't pay. Anthem Blue Cross of California, Blue Shield and Health Net said it was closer to 15 percent.

Federal officials say they've noticed the same trend nationwide.

As I've pointed out repeatedly, it's not enough to know how many haven't paid, it's also important to know when the unpaid policies actually start as well as why they haven't paid yet.

This adds to the detailed Vermont data I posted about a month ago:

...A total of 16,906 QHP enrollees as of 2/10, of whom 13,514 are paid up. Overall, this points to an 80% paid rate, which is very good--but the monthly breakout is even more interesting: January-start enrollees have a 92% paid rate (which you'd certainly hope for by now, considering that we're into mid-February) and February-start enrollees are at 79% paid. The March-start enrollees (14%) are the ones providing the main drag on the total...but this is hardly shocking since the start date for that coverage is still over 2 weeks away.

Now, this data is obviously quite outdated by now, and Vermont is hardly typical of the nation, but you begin to see my point: The enrollments don't exist in a vacuum.

California had 229,000 people enroll in January, vs. 499,000 from October - December. However, you had to be enrolled by 1/15 to have your coverage kick in on 2/01, and almost exactly half of the January enrollments came in by then.

In other words, the 85% January 31 payment data includes 124,000 enrollees whose coverage didn't start until March first anyway.

As it happens, the Vermont data came in exactly 1 month ago today (Feb. 10), which makes it a bit more useful as a guideline. It suggests the following breakdown for California enrollees to achieve an 85% overall payment rate (I've subtracted about 8,000 to correct for the HHS report including the first day of March):

  • 720,000 enrollees 10/01 - 1/31: 85% paid (about 612,000)
  • 604,000 enrollees 10/01 - 1/15: 92% paid (about 556,000), which would mean:
  • 124,000 enrollees 1/16 - 1/31: 45% paid (about 56,000)

The point is, it's not as simple as saying "how many have paid???" when the payment isn't even due (or in some cases, the bill isn't even sent) for weeks or even, in some cases, months after the person enrolls. Anyone who enrolls between March 16 - March 31st won't even have their policy start until May 1st. Considering that everyone expects a huge last-minute spike in enrollments, don't be surprised if nearly a million people haven't paid by sometime in mid-April...when their policy doesn't even kick in until May.

In other words: We won't have a fair answer to  "How many have paid?" until LATE MAY.

I'm also going to repeat what I just posted an hour ago: There's another side of the problem, which I've discussed repeatedly myself and have even experienced myself: When the supposed "failure to pay" is actually on the insurance company's side, not the policy holder's or the exchange's. If the company fails to actually bill the customer, or their billing system screws up in processing or confirmation of payment, that's THEIR issue, not anyone else's. Again, there's no way of knowing what percent of the non-payments these issues make up, but I know from anecdotal evidence that it's a lot of people (including my wife and took BCBSM until early February to confirm our December payment for January coverage). Our story sounds an awful lot like this case:

For some Californians, however, the biggest problem wasn't paying for a plan, it was getting confirmation that their payment had been processed.

It took Woodside resident Jennifer Jones and her husband a nerve-racking seven weeks and two payments -- the first paid by check, the second online -- before their insurance company finally acknowledged that they were insured.

"It was extremely chaotic, just a nightmare," said Jones, a marketing consultant, who stopped payment on the initial check she wrote after waiting seven weeks for the insurer to cash it.

Having said all of this, I've entered California's data--through January 31st--into the Paid/Unpaid chart; with that updated, the overall paid enrollment estimate is up from around 76% to 79%. Just remember that most of the other states aren't distinguishing between the start date of their respective enrollees.

Until some solid data on the question is provided, my revised back-of-the-envelope estimate will be:

  • Appx. 10% unpaid for legitimate reasons (not due yet or insurance company billing system screw-ups)
  • Appx. 10% unpaid for NON-legitimate reasons (deadbeats, exchange screw-ups, etc)

Until I receive convincing evidence otherwise, I'll continue to assume that around 90% of official enrollments should continue to be counted as a bare minimum exchange-based QHP enrollment figure.