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Insurers see high exchange plan payment rates

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(Bloomberg) — Three large health insurers — WellPoint Inc. (NYSE:WLP), Aetna Inc. (NYSE:AET) and Health Care Service Corp., the parent of Blue Cross and Blue Shield of Illinois — say a high percentage of their new public exchange plan customers are paying their first premiums.

As many as 90 percent of WellPoint exchange “qualified health plan” (QHP) customers have paid their first premium by its due date, according to written testimony the company prepared for a congressional hearing today.

For Aetna, the payment is in the “low to mid-80 percent range,” the company said in its written testimony.

Health Care Service Corp., which operates Blue Cross Blue Shield plans in five states including Texas, said that number is at least 83 percent.

Making the first monthly payment is the last step to confirm enrollment in plans sold under the Patient Protection and Affordable Care Act (PPACA).

Republicans have questioned whether the Obama administration has greatly inflated QHP enrollment numbers by blurring the distinction between people who have signed up for QHPs and people who have actually paid for QHP coverage.

“What you have here is very solid first year enrollment, no matter how you slice it,” Dan Mendelson, president of Avalere Health, a consulting firm, said in a phone interview. “This thing is, at this point, well entrenched.”

While the Obama administration says that 8 million people signed up for private plans using the law’s insurance exchanges, federal officials have said they don’t track first premium payments.

Due dates for the first premium vary by company and aren’t always strictly enforced. WellPoint, for example, asks for payment by the 10th of the month for coverage that begins on the first. While Aetna asks for payment by the day before coverage begins, “we are being flexible if enrollees have extenuating circumstances,” a spokeswoman for the company, Cynthia Michener, said in an e-mail last week.

Republicans on the House Energy and Commerce Committee invited insurers to testify on enrollment after publishing a report last week claiming only two-thirds of people who signed up had paid their first premium.

“That was just foolishness on the part of the committee to even publish that number because it was completely out of context,” Bob Laszewski, an insurance industry consultant in Alexandria, Va., said in a phone interview.

The Republicans reported a lower percentage of paid premiums in part because they surveyed insurers only on payments received by April 15. At least 3 million people signed up for coverage that didn’t begin until May 1 or later; their premiums weren’t due until at least April 30.

The Republicans say they plan to update their report about May 20, when premium due dates will have passed for most individual QHPs.

“After months of excuses, we took the administration’s advice and asked the insurance providers themselves for basic enrollment figures,” Rep. Fred Upton, the chairman of the committee, said in an e-mail from a spokeswoman. “Tomorrow’s hearing will allow us to further explore the status of implementation and provide greater transparency and certainty moving forward.”

Spokeswomen for the White House and the U.S. Department of Health and Human Services (HHS) didn’t immediately offer comment.

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