Surprise: Insurers begin granting grace periods to pay first month of premiums on new ObamaCare plans

When you’re staring at 95 percent nonpayment in some cases and an unholy clusterfark in January of people not realizing that their coverage hasn’t taken effect yet, you’re going to do everything you can to mitigate the problem.

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And this will mitigate it. A little.

As a deadline approaches for people to sign up for medical insurance under President Barack Obama’s healthcare law, some insurers and state-run online marketplaces are giving shoppers an extra week to pay their first premiums.

The shift to early January from the end of December provides a short grace period for insurers and shoppers to work through any errors in the new policies caused by technology problems dogging enrollment since it opened on October 1…

Aetna Inc, which is selling health insurance on exchanges, or marketplaces, in more than a dozen states, will allow consumers to pay premiums as late as January 8. The Connecticut exchange, Access Health CT, said some shoppers can pay as late as January 7. The Vermont exchange and Covered California have announced similar extensions while Maryland requires payment by January 15.

Cristine Vogel, a Navigant Consulting associate director who has health insurers and providers as clients, said that the grace period is a way for insurers to keep their members at a time when confusion about coverage is expected.

That’ll avert lapses in coverage for people who see the doctor early next month, not realizing that their first payment was already due by New Year’s Eve. Remember, though, according to one expert who spoke to Charles Ornstein about this, insurers can probably expect only half of their customers to have paid up by the December 31st deadline. Even if another 25 percent manage to make payment during the grace period, you’re still looking at thousands of people whose coverage will lapse in January. That’s a political disaster for HHS in the making. Uncle Sam will have to do something about it. But what?

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Bob Laszewski says insurers are telling him that only about 20 percent of “enrollees” have made their payments so far. And that’s not all:

As of this week, the 834 transaction error rates (enrollments sent from the government to the health plans) are better than they were in October and early November but are still running in the 5% to 10% range––a place they have been for a number of weeks now.

The Obama administration has still not built the reconciliation computer system needed to clean up the remaining enrollment data issues between HealthCare.gov and the health plans. The health plans have been told to expect an electronic file in the next few days, containing what the feds think are the health plan’s enrollments through November. The plans will then have to figure out how to reconcile the two lists and then fix the problems. Many plans will have thousands of enrollments to reconcile. There will be another such file coming in January for the December enrollments with likely tens of thousands of more names to reconcile. That means that any December errors will have to be fixed before people can be covered, thereby creating additional customer service issues until the files can be cleaned up.

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We know there’s already a backlog of tens of thousands of applications in some of the state exchanges, but we don’t know — as usual — how bad it is at the federal level. That’s another incentive for insurers to grant a grace period for people who miss their payments: If their enrollment is voided due to nonpayment and they’re forced to re-enroll, not only is there a chance they’ll sign up with a different insurer, it’s more paperwork for their current insurer even if they decide to stick with them. And thanks to President Bumblefark’s botched website and delayed deadline for enrollment, more paperwork in late December/early January is something insurers simply can’t afford.

Exit question: Is it possible that some people out there don’t yet understand that they’re expected to pay at all? I’m tempted to say no: When you shop on the exchange, the premiums are listed right there in front of you. If anything, the greater risk is that people are paying too much attention to the pricetag and overlooking the fact that their new deductibles might be higher than expected and their provider network smaller than expected. On the other hand, if I’ve learned one thing from blogging polls over the years, it’s that you should never underestimate the stupidity of the very low-information voter. Could it be that there’s someone out there who’s so stupid that he/she thinks insurance in the age of Obama Claus is free? Exit answer: Yes.

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Karen Townsend 2:00 PM | April 25, 2024
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