Report: 20% of Obamacare 'Enrollees' to See Cancellation Notices Soon
by John Sexton 30 Jan 2014, 11:57 AM PDT
One in five Obamacare "enrollees" could have their plans cancelled for failure to pay their first month's premium. That figure is based on reports from health insurers themselves, some of whom have made 10 attempts to collect the first payment.
The exact percentage of those who pay (the actual definition of enrollment) varies among insurers according to a report Thursday by CNN Money. Medical Mutual of Ohio put the figure at 88 percent while CoOportunity Health put it lower at 82 percent. CoOportunity CEO Cliff Gold tells CNN "We figure either those people had a change of heart or thought it was too expensive." WellPoint would only say a majority but not a "vast majority" had paid their first premium. CNN estimates the overall percentage of insurers it polled at one in five.
Earlier this month health insurance expert Bob Laszewski estimated, based on his contacts in the industry, that 10-20 percent of Obamacare enrollments would be dropped for failure to pay. CNN's report suggests the actual figure will be closer to the upper end of Laszewski's estimate.
The Obama administration has reported that, as of December 28th, 2.1 million people had enrolled in private insurance plans. However the administration counts anyone who selected a plan on a health exchange website as enrolled whether or not they have paid a premium.
The high rate of cancellations will certainly have a political impact in not an immediate policy impact. If the 20 percent figure highlighted by CNN is accurate, roughly 400,000 people the administration has already counted as enrolled under Obamacare will receive cancellation letters. That's considerably more than the total number who enrolled in October and November combined. It would also mean the total number of people enrolled did not pass 3 million as HHS claimed last week.
Those individuals who are canceled for non-payment will need to start over in order to get insurance before the enrollment period ends in March. Presumably, those who do so will be counted as enrolled a second time unless HHS is careful to exclude duplicates or simply revises its earlier numbers downward to account for cancellations. It's just one more asterisk to add to the list of already dubious numbers coming from the administration.