New McKinsey Study claims 87% QHPs paid as of 4/16, but...

Hat Tip To: 
Alan D., Jim C.

I spent quite a bit of time ripping on prominent healthcare/economic writers for their slavish worship of the February study by McKinsey & Co., which claimed, among other things, that only 27% of QHP enrollees were newly insured as of mid-February.

I should reiterate, however, that I was never directly criticizing the study itself...only the completely unfounded conclusions that so many anti-ACA pundits tried to draw from it. The main issue is that the McKinsey study included both on- and off-exchange enrollments (and stated so a good half-dozen times throughout), without any indication of what the ratio between the two was. As a result, that 27% figure could conceivably mean 54% of the on-exchange and 0% of the off-exchange enrollees, or vice-versa, making it completely useless for getting an answer to the question of how many EXCHANGE-BASED QHPs were previously insured.

Since then, we've learned that the number of OFF-exchange QHPs since October appears to be close to the number of exchange-based ones...between 5 - 8 million, which was kind of my point all along.

In any event, the McKinsey group has released a new report. The most irritating thing is that they didn't wait until after the open enrollment extension period was (pretty much) over on April 15...they conducted their survey between April 7 - 16. Waiting just one more week would have given a much clearer picture, but this is still much more complete than the mid-February survey was, so there's that.

Anyway, here's their findings:

First of all, they are once again VERY CLEAR that this survey, like the prior ones, includes both on- and off-exchange QHPs:

Each survey included consumers reporting that they enrolled in healthcare coverage for 2014 (either on or off an exchange or by renewing an existing plan), those reporting that they shopped but did not enroll, and those reporting that they did not shop for health insurance during OEP.

Second, they claim the total percent of newly-insured enrollees (again, including both exchange-based and off-exchange based) hasn't changed since fact, they found this number to have gone down slightly, which both I and, I suspect, everyone else (even ACA critics) find difficult to believe given the completely different makeup of the later enrollees in March and April from those who enrolled earlier, but whatever:

Of all respondents who reported having selected a new QHP plan at the time of the April survey (either on or off the exchanges), 26 percent reported being previously uninsured. This percentage is similar to the one we found in our February survey (27 percent).

They also blow yet another hole in the absurd GOP House Committee's "67% paid" report:

Eighty-seven percent of all respondents who reported having selected a new 2014 QHP indicated that they had already paid their first premium. Reported payment rates were higher among those previously insured and those aged 30 or older. A slightly lower percentage of respondents (80 percent) reported that they definitely intend to pay future 2014 premiums;3 that intention was lower among those previously uninsured than among those previously insured (71 percent vs. 83 percent).

Here's the thing, though: IF 87% of all exchange-based QHPs were paid up as of 4/16 (possibly even earlier, since the survey ran from 4/07 - 4/16), then that would be fantastic from my POV, since a) it's a whopping 20% higher than the GOP report claimed as of the same date, and b) given that there were still 2 weeks to go before 38% of the 8 million exchange QHP payments were even due, it strongly supports my "93% paid" estimate as of the end of May.

HOWEVER, here we run into the same problem as the "previously insured" issue: The McKinsey study, by mixing together exchange-based and OFF-exchange QHPs without distinguishing between the two, does not tell us this.

Consider the official testimony provided to the GOP House Committee by Health Care Service Corporation (which operates Blue Cross Blue Shield of Illinois, Montana, New Mexico, Oklahoma and Texas...a pretty major provider indeed). If you look at the table on Page 3, you'll see that the payment rate between exchange-based and off-exchange QHPs can actually vary quite a bit:

As you can see, the exchange-based QHP payment rate appears to average around 3.6% lower than off-exchange enrollments (oddly, the rates reverse themselves for May 1st start policies).

If I'm not going to use the McKinsey report as a basis for "how many were previously insured" due to them mixing on and off-exchange numbers, I can't really use it as a basis for the "how many have paid?" issue which has the same problem.

I suppose I could just knock 4% off the number and assume an 83% rate as of 4/16, which would seem to resolve the on/off issue...but again, that only gives a baseline as of 4/16, and doesn't tell us how much higher the rate has gone up in the 3 weeks since then.

Anyway, I'm presenting this mostly just for completeness' sake. As before, without knowing how many of the exchange-based QHPs only were previously insured, that 26% (down from 27%???) is still fairly useless for purposes of either defending or attacking the ACA.

To their credit, as they did in February, McKinsey is very frank and up front about the "off-exchange included" thing and how this makes the study kind of useless for the purposes that most ACA pundits (pro or con) have tended to use the prior one for:

Our findings cannot be directly compared to publicly reported exchange enrollment data because our surveys covered the entire individual market, not just the federal and state exchanges. Furthermore, our survey was conducted only in English, and thus its findings cannot be compared against studies that included questions in Spanish or other languages.