by Wynton Hall 31 Dec 2013, 10:45 AM PDT
Half of the people who have signed up for Obamacare in 17 states have not activated their health insurance plans by making their first premium payment, a trend that threatens to further embarrass and frustrate President Barack Obama and the highly unpopular Obamacare program.
Health insurance plans purchased through Obamacare only kick in once a customer pays their first month's premium. On Monday, the Wall Street Journal reported that "only about half of enrollees billed for plans offered by more than 100 insurers in 17 states had paid their first month's premium," according to Benaissance chief strategy officer Mark Waterstraat, whose firm serves as a third-party billing company for insurers. Another insurer, Scott & White Health Plan, told the Journal that only 35% of its enrollees have paid for the plans they applied for.
The Obama administration remains far behind its 7 million enrollment target but has recently celebrated what it calls two million Obamacare "enrollments." Yet that figure merely reflects the number of applications submitted, not the number of paying customers who have turned on their plans by actually paying for coverage. Whether insurers in the other 33 states are experiencing nonpayment rates in the 35% to 50% range is presently unknown. If those rates extended nationally, they would mean the Obama administration's claim that it has enrolled two million people in Obamacare would plunge to just 700,000 to one million.
Even progressive groups like the left-leaning journalism group ProPublica say the emergence of an Obamacare nonpayment gap raises "the prospect that actual enrollment will be far lower than the figures HHS [Health and Human Services] is releasing."
Part of the problem may be the costs of the plans offered through Obamacare. A recent USA Today analysis found that over half of all counties in the 34 states on the federal HealthCare.gov exchange "lack even a bronze plan that's affordable by the government's own definition."
"There is also a lot of worrying going on over people making payments," industry consultant Robert Laszewski told ProPublica.
Experts say that first-time insurance buyers may not fully understand the duties and responsibilities that come with ownership. A recent study published in the Journal of Health Economics found that only 14% of individuals who have health coverage could correctly answer all four of four basic questions about health insurance, including understanding what a “deductible” and “copay” mean. If comprehension levels are that low for those who already have insurance, analysts worry what that might mean for first-time insurance purchasers, especially for a program as complex as Obamacare.
Persistence of the Obamacare nonpayment trend would pose serious challenges for the Obama administration's ability to hit its goal of seven million paying customers by the end of March.
According to the latest CNN poll, support for Obamacare is now at a record low 35%.
Obamacare will cost U.S. taxpayers $2.6 trillion over the next ten years.