Many Of Those Not Paying Obamacare Premiums Obtain Alternate Health Care Coverage And Remain Insured

Now that we have data on the number of people who have signed up through the exchanges there remains a question as to how many will actually pay their premiums and obtain coverage. It is not possible to have an exact number on this as coverage for those who signed up in the late April surge doesn’t start until May 1 and the premiums aren’t due until mid April

National Journal repeats estimates which have been floating around that 15 to 20 percent have not paid premiums. Other estimates have placed this at 10 to 15 percent. The report does make a major error in making assumptions about how many are actually covered based upon these numbers: “If the nationwide payment rate, across all carriers, remains at 80 to 85 percent, the 7.1 million sign-ups Obama announced Tuesday would translate into somewhere between 5.7 and 6 million people who are actually covered.”

This conclusion is erroneous as it suggests that those who do not pay their premiums remain uninsured. Kaiser Health News has found that a large number of those not paying their premiums are not paying because of receiving alternate insurance coverage, not because of remaining uninsured:

Why Some Don’t Pay Their Obamacare Premium: It’s Not What You Think

A new analysis finds that many people who signed up for a Covered California health insurance exchange plan are likely to drop the coverage for a good reason: They found insurance elsewhere.

Researchers at the U.C. Berkeley Labor Center released estimates Wednesday showing that about 20 percent of Covered California enrollees are expected to leave the program because they found a job that offers health insurance. Another 20 percent will see their incomes fall and become eligible for Medi-Cal, the state’s insurance program for people who are low income.

In addition to the 40 percent of enrollees who move to Medi-Cal or job-based insurance, between 2 and 8 percent of those who sign up for Covered California are estimated to become uninsured, the analysis noted.

This process — “churn” to those who study health insurance — is well-known in the Medi-Cal and individual insurance market.

According to the report between 53 and 58 percent of Covered California enrollees are expected to stay in a Covered California plan for 12 months. This analysis is consistent with a Kaiser Family Foundation study published earlier this year. It found that of people who enrolled in an individual insurance plan in 2010, years before the health law fully kicked in, only about 48 percent were still in the individual market two years later. (Kaiser Health News is an editorially independent program of the foundation.)

The question of how many people have paid their premium has become a political issue, with questions being raised about the true enrollment in an ACA plan. But Ken Jacobs, chair of the Labor Center and an author of the new study, said that even 15 percent non-payment of premiums “was not a surprising number.”

He said that according to the analysis, in any 3-month period, an estimated 10 percent of enrollees could be expected to leave Covered California, although he says that indeed some may leave the exchange “because the cost was too high.”

On Monday, Peter Lee, executive director of Covered California said 87 percent of enrollees had paid their premium.

Besides disproving the assumption that not paying premiums indicates that people remain uninsured, it is also notable that thirteen percent have not paid their premium, a lower number than reported by National Journal. The number may decrease further as those who enrolled in late April pay their premiums when due.

Update: notes additional errors in the numbers given in the article from National Journal and estimates that those actually paying their premiums might be as high as 95%. Lower numbers estimated by others are due to numbers from dates before the premiums are actually billed or due.

Cross posted at The Moderate Voice

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