Exclusive: Massachusetts: 90%+ QHP Payment Rate Confirmed

So far there have been two comprehensive post-Open Enrollment Period reports released. The first was for Washington State, posted a couple of weeks ago; the second was for Massachusetts, posted last week. While both reports were chock full of all sorts of data-nuggety goodness, including updated paid QHP numbers, neither one included one crucial number: How many total QHP selections there have been in each state since Open Enrollment ended in February.

For most purposes, the paid number is actually the more important one, because if someone never pays even their first monthly premium, their policy isn't effectuated at all, so it's kind of irrelevant. However, if you want to get an idea what the payment trend is, you need to have both numbers. That's how, last spring/summer, I came up with my ballpark estimate of roughly 88% of all QHP selections actually being paid for (I originally had it pegged at around 93%, but eventually backed this down to 88% after some corrected data came in from California and other states).

88% has been my rule of thumb ever since, and has been proven to be pretty close to the mark whenever hard numbers have become available. Eventually, even the Obama administration (which, until then had only given a vague, mushy "major carriers report anywhere from 80-90% are paying" range when pressed on the issue) finally confirmed my estimate (although they knocked it down 1% to be on the safe side, I presume).

Anyway, that was last year. For 2015 I've kept my official ballpark estimate at around 88% as well, but back in November I (along with a few site regulars) speculated that the overall payment rate this year will likely be somewhat higher than 88% for a variety of reasons:

  • Data transfer improvements at pretty much all of the ACA exchange sites (both HC.gov as well as the state-based exchanges)
  • Technical improvements in the invoicing, billing & processing systems of the handful of exchanges which handle billing directly (MA, WA and RI, I believe)
  • Technical improvements in the invoicing, billing & processing systems of the actual insurance companies
  • A good half of the 2015 enrollees are renewed from 2014 and have thus already proven themselves to make payments on a regular & reliable basis
  • Many of those renewing from 2014 (along with some number of the new additions) are set up with automatic payments through their bank/credit card company

In November I concluded that:

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.

Well, I don't know about the "well above" part, but today I confirmed with the Massachusetts Health Connector that the 145,196 QHP enrollments which had been paid for as of April 1st were out of a total of 161,466 QHP selections.

That means that Massachusetts, at least, currently has a payment rate of 89.9%.

Furthermore, 17,104 of those 161K came in after 2/26 (not starting until at least April 1st), and some of those (probably at least 25%) came in after 3/23, which means they won't start coverage until May 1st. In other words, the first payment isn't even due for another week or so for several thousand enrollees.

Add all this up and the Bay State appears to be looking at a good 90-92% payment rate for 2015.

Of course this doesn't prove anything for the other 49 states (or DC). The only other hard payment rate data I have so far is:

  • Rhode Island: On 2/26, RI confirmed 30,001 paid enrollments out of 31,513 QHP selections. This looks like a 95.2% payment rate. Unfortunately, RI also stripped out some of their unpaid QHP selections from the 31.5K total (the ones which were past-due), so the actual payment rate is likely slightly lower.
  • Vermont: On 2/19, VT confirmed 23,913 paid enrollments out of 31,552 QHP selections. This looks like a 75.8% payment rate, which kind of blows. However, their final official QHP tally as of 2/21 was a bit higher at 31,619, and again, anyone who enrolled after 2/16 wouldn't have their policy start until April 1st, which means several thousand people's payments weren't due until several weeks after the 2/19 report.
  • Washington State: On 3/26, WA confirmed 165,436 paid enrollments...unfortunately, WA is only reporting paid enrollments, not total QHP selections, so it's impossible to know what their payment rate is since there's no denominator to divide into. Presumably WA's payment rate is less than 100%, but without that missing number it's speculative, and I have to leave them at 88% for now.

I have no hard data whatsoever for any other state.

If you take the four above at face value (90%, 95%, 76% and 100%), you get a total of 364,546 paid out of 390,034, or 93.5%.

If you take WA out of the picture (the most obviously suspicious of the 4), you get 199,110 out of 224.598, or 88.7%.

I'm still waiting on more hard numbers before being certain about this, but it seems that a flat 90% or higher is what we're likely looking at nationally.

What does this mean for the rest of the year? Well, I've used an 88% initial payment rate as the basis for my monthly enrollment/attrition estimates, which currently have 2015 ending with roughly 13.7 million QHPs selected, of which 12.0 million will pay up and 10.0 million will likely still be enrolled by year's end.

If the actual average ends up being 90% (with everything else remaining the same), this changes to 13.7M selected, 12.3M paid and ending the year with around 10.1 million.

Not a huge difference--either 300K or 100K depending on your perspective--but more than a rounding error.