"But How Many Will PAY??": Up to a 94% payment rate in 2015?

As I keep hammering over and over, asking "How many have PAID??" is a perfectly reasonable question to ask...as long as you a) wait until after the payments in question are actually due and b) you make sure to be as comprehensive as possible, since payment rates can vary from state to state or even insurer to insurer.

If you don't, you end up with a big ol' pile of crap like the infamous GOP House Energy & Commerce Committee "report" from back in April which tried to claim only a 67% first month payment rate when the actual rate ended up being around 88%.

Based on this, my initial rule of thumb is to go with a flat 88% payment rate for 2015 enrollments. Again, that doesn’t mean the current enrollments have hit 88%; it means that’s how many I’m expecting to pay their first premium by mid January. (Officially, payments are due by around 12/23/14 for January 1st coverage, but many companies offer grace periods, etc.) The same would hold true for the rest of the year: Enrollments from 12/16/14 - 1/15/15 should hit around 88% by mid-February; from 1/16/15 - 2/15/15 by mid-March and so on, even into the off season.

I actually think the payment rate will be slightly better this year due to improvements/streamlining of the invoicing/billing process at both the exchanges as well as the insurance companies operating on them, but I've been sticking with 88% until hard data comes in to err on the side of caution.

However, two different regular supporters, RugbyMom and Paul Mullen, brought up the same interesting point yesterday: Assuming around 6 million or so current enrollees do end up renewing their policies (or at least switch to a different policy through the exchange), those folks have already proven that they pay their bills on a consistent, reliable basis. In fact, many of us (my wife, son and I make up 3 of this group) are set up with automatic payments already.

Most of those who were unwilling or unable to pay their bills after enrolling were already weeded out last spring, and most of those who couldn't/wouldn't pay for more than the first premium or two were further weeded out by this fall. That means there are still around 6.7 million people enrolled now who, if they renew/re-enroll, are virtually guaranteed to keep paying their premiums throughout the year (unless, of course, they choose to drop their policy due to a major life event). For this group, the "payment rate" should be pretty close to 100%.

That leaves the new enrollees. Let's assume that group pays at the same 88% rate or so. Again, assuming 12 million total, and assuming half of those (6 million) are renewals, that suggests that the total 1st month payment rate should be higher--perhaps as high as 94% or so!

Another factor to consider: Technically speaking, not all of the "new" enrollees will actually be "new". Yesterday's HHS press release specified that all Oregon and Nevada enrollees through Healthcare.Gov are categorized as "new" even though they're already enrolled in 2014 policies via those now-defunct state exchanges. That's up to another 109,000 people who are very likely to pay at a close to 100% rate. The same may hold true for current Massachusetts, Maryland and possibly Idaho enrollees, depending on how they're categorized.

In short, I'm going to keep the 88% rate in place until I have some hard evidence of the above, but there's a very good chance that the actual payment rate will be well above 90% this time around.