Insurers Give Consumers More Time To Make January Premium Payments

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By Sara Hansard  

Dec. 18 --An industry group for health insurers Dec. 18 said insurers are now giving consumers additional time to make payments for their January coverage under the Affordable Care Act.

America's Health Insurance Plans said insurers will voluntarily give consumers until Jan. 10 to pay the first month's premium, and coverage would be retroactive to Jan. 1. But consumers still must pick an ACA marketplace plan by Dec. 23.

However, some states won't change to a Jan. 10 deadline.

The previous deadline for paying the first month's premium was Dec. 31. Coverage starts in January under the ACA.

AHIP issued an announcement saying “to provide greater peace of mind for consumers purchasing coverage through the new federal and state marketplace,” its board of directors announced the voluntary deadline extension.

The Department of Health and Human Services released an interim final rule Dec. 12 in which it encouraged insurers to give people more time to make payments due to the problems experienced by the enrollment website for the federally-facilitated marketplace (240 HCDR, 12/13/13).

Although states have the flexibility to impose different deadlines, consumers across the country will have more time to pay their first month's premium, which is necessary for coverage to begin, AHIP said in a release. It advised consumers to check with their plans for more details about specific policies.

In a majority of the states, the federal government is operating the ACA marketplaces, using the website for enrollments.

Extension Not in All States

In a call with reporters Dec. 18, officials from several states operating their own marketplaces said that AHIP's announcement wouldn't necessarily change payment deadline plans they have made with insurers. “Health care is local. The arrangements are local. The delivery is local. The payment's local,” said Peter Lee, executive director of Covered California. Under arrangements made with California insurers offering plans in the state's marketplace, payment must be made by consumers Jan. 6 for coverage effective Jan. 1, he said.

Kevin Counihan, chief executive officer of Access Health CT in Connecticut, indicated that AHIP's announcement would create more confusion for consumers. “One of the challenges, I think, for the consumers in this whole thing is that it just seems like information, rules, policies, change so much. It just gets very confusing.” Connecticut will stick to the Jan. 7 premium payment date it established with its health plans, he said.

Connecticut officials are also working with the Connecticut Hospital Association “to try to see that if there is some issue around eligibility or enrollment during this period of January, if there can't be some flexibility on that as well,” Counihan said in the call, organized by the group Families USA, a group that supports the ACA.

Carrie Banahan, executive director of the Kentucky Health Benefit Exchange, said payments are due Jan. 1 in Kentucky, although state officials are working with insurers “maybe for a slight extension on that date.

Lisa Sbrana, counsel to New York State of Health, said New York has established a Jan. 10 grace period with insurers for payment for coverage effective Jan. 1.

Recent Enrollment Surges

In the press call, officials from five state-based marketplaces reported enrollment surges in recent weeks leading up to the Dec. 23 deadline to select plans for coverage that takes effect Jan. 1. In several states, the share of enrollments in qualified health plans was beginning to increase, although overall enrollment in Medicaid was still predominant in most of the states.

About 450,000 people completed applications for coverage through Covered California, Lee said. About 180,000 people were determined to be eligible for Medi-Cal, the state's Medicaid program, he said.

In November, about 80,000 people selected a health plan in Covered California, Lee said. Just in the first week of December, 50,000 people picked a plan, averaging 7,000 a day, he said. For Dec. 9 and Dec. 10, enrollment was about 15,000 a day, he said. “We are seeing huge interest,” with more people aware of the marketplace, he said. The enrollment figures reported for the marketplaces don't include plans sold outside of the marketplaces, Lee said.

As word spreads among families and friends about the new coverage and momentum builds through local outreach, Lee said, “we are quite confident as we go into the next half of open enrollment starting in January that we'll continue to see this momentum.”

The initial ACA open enrollment lasts until March 31. Under the ACA most people must have coverage as of Jan. 1 or they face having to make a “shared responsibility” payment that starts at $95 a year per person, or 1 percent of income over the threshold for filing a tax return, whichever is greater.

Enrollment Demographics

Lee said about 21 percent of marketplace enrollment is for people aged 18 to 34, “very similar to the percentage of the population.” In addition, he said, “Every one of our states is dramatically understating the percentage of enrollment of children under 18, because all of us have substantial enrollment of adults in our programs in the marketplace through subsidies, with children enrolling in the state's Medicaid program.” There has been worry that enrollment in the marketplaces overall comprises older people who will cost more to cover, which might push up premiums for 2015.

In California, there are “major differences” in plans chosen by people who are eligible for premium subsidies under the ACA versus those who aren't eligible for the subsidies, Lee said. Among people who are eligible for subsidies, those earning between 100 percent and 400 percent of the federal poverty level, two-thirds pick a “silver” tier plan that covers an average of 70 percent of medical claims, and 18 percent are choosing “bronze” plans that cover 60 percent of claims, he said.

For people who aren't eligible for subsidies, 30 percent have chosen bronze plans, 27 percent chose silver plans, 15 percent chose gold plans covering 80 percent of claims and 24 percent chose platinum plans covering 90 percent of claims, he said. “Those that make more money don't rely on the subsidy to get the lowest-priced product. They want to buy what they think is the best deal for them.”

Connecticut, New York

Counihan said the Connecticut marketplace “continues to experience good growth,” and has about 47,000 enrollees, getting about 1,400 enrollments a day and 6,000 calls a day to its call center. Enrollment between private insurance plans and the state's expanded Medicaid program is split nearly evenly, he said, with 23,410 for qualified health plans (QHPs) sold in the marketplace and 23,047 in Medicaid. Seventy percent of people enrolling in the QHPs are eligible for subsidies, he said.

About 30 percent of Connecticut's enrollees are under the age of 35, Counihan said. He said too much focus has been given to the age characteristics of ACA enrollment because there are “very rich” risk adjustment programs under the ACA that will help insurers ameliorate risk, and enrollment continues until March 31.

In a proposed rule released Nov. 25 by the Department of Health and Human Services (228 HCDR, 11/26/13), an ACA reinsurance program to protect plans against covering too many sick people “was dramatically strengthened” by lowering the level at which major claims are covered from $60,000 to $45,000, he said. “It makes it much more likely that higher-cost claims get into the reinsurance pool earlier,” he said.

Sbrana said New York has experienced a 34 percent increase in enrollment from the week of Dec. 9 to the week of Dec. 16. As of Dec. 16, 134,622 people were enrolled in coverage, and 363,258 New Yorkers had completed applications, she said.

About 70 percent of enrollees are going into QHPs and 30 percent into Medicaid, because the state already has high Medicaid enrollment, she said. New York will release more data on the demographics in the next month, she said. “We're seeing a good mix of enrollees across age groups,” she said.

Washington State, Kentucky

Richard Onizuka, chief executive officer of the Washington Health Benefit Exchange, said about 20,000 people had enrolled in QHPs through Nov. 30, about a fifth of whom were for people who don't qualify for subsidies. Another 55,000 people have completed applications and need to make their first payments, he said. Total enrollment, including Medicaid, is about 180,0000, he said. While 85 percent of Washington's ACA enrollment is in Medicaid, “What we've seen in the last few weeks is that split is increasing on the QHP side,” he said.

In November, 18 percent of enrollees were between the ages of 18 and 34, and about 40 percent were between 55 and 64, Onizuka said. About 59 percent of the QHP enrollees were choosing silver plans in Washington.

“We've had some challenges,” with the system out of operation most of the first week of December, Onizuka said.

Banahan said the Kentucky Health Benefit Exchange has experienced a 40 percent increase in the number of applications filed since Thanksgiving, and the state has enrolled more than 92,000. About 70,000 people are in Medicaid and about 23,000 have enrolled in a QHP, and the share of QHPs has risen in recent weeks, she said.

Forty-one percent of total enrollments in Kentucky are under the age of 35, and 29 percent of the QHP enrollments are under the age of 35, she said.

Report on Prospects for ACA

Separately, the Robert Wood Johnson Foundation released a report Dec. 18, “The Affordable Care Act Can Survive Low Enrollment and Adverse Selection in the First Year,” finding that the ACA can survive a slow start with lower than anticipated enrollment and a sicker-than-average coverage population because of built-in risk adjustment programs in the law.

“Despite improvements in recent weeks, the controversial launch of the website and the government's response to the furor over policy cancellations raise the likelihood of low enrollment levels in the Health Insurance Marketplaces' first year of operation,” said the report, by Linda Blumberg and John Holahan.

“Policies put in place under the law to account for this possibility, such as risk corridors and risk adjustment, will provider insurers with some significant financial protections,” it said. In addition, “low enrollment does not necessarily mean adverse selection.” Further, “Insurers cannot recoup losses without achieving significant market share, and achieving market share requires that they price their products competitively for expected enrollees in the coming year,” it said.


To contact the reporter on this story: Sara Hansard in Washington at

To contact the editor responsible for this story: Brian Broderick at