From the Thursday edition of the Morning Jolt:
Another Looming Disaster: Few Exchange Signups Have Paid for Their Insurance So Far
We’ve been warning that Obamacare would be a train wreck for a long time. Now the boxcars full of dynamite reach the impact point.
Pardon the ALL CAPS, but this seems like a fairly huge point: ALMOST NO ONE HAS PAID FOR THEIR INSURANCE YET!
The U.S. Department of Health and Human Services announced this morning that nearly 365,000 Americans had signed up for private health insurance under Obamacare. The vast majority came from 14 states running their own insurance exchanges, while 137,000 came by way of HealthCare.gov, the much-faulted federal website that handles enrollment for the remaining states.
But amid the rush to enroll as many people as possible by the December 23 deadline, there’s a huge caveat that isn’t getting much public attention: In order for coverage to take effect on Jan. 1, enrollees must pay their first month’s premium on time. (The deadline varies somewhat by state and by insurer.)
That’s slow going, according to consultants and some insurers, raising the prospect that actual enrollment will be far lower than the figures HHS is releasing.
“There is also a lot of worrying going on over people making payments,” industry consultant Robert Laszewski wrote in an email. “One client reports only 15% have paid so far. It is still too early to know for sure what this means but we should expect some enrollment slippage come the payment due date.”
Another consultant Kip Piper, agreed. “So far I’m hearing from health plans that around 5% and 10% of consumers who have made it through the data transfer gauntlet have paid first month’s premium and therefore truly enrolled,” he wrote me.
Sure, some of these folks are writing the checks right now, or will in the coming days. Obamacare defenders are quick to point out that people don’t like to pay for services ahead of time. But some significant chunk won’t pay on time — they’ve got about two or three weeks to make that first payment — and thus they’ll begin 2014 without health insurance. And these are the folks who made it through the glitchy exchanges! The question is whether or not they realize that they’re not really insured before or after they end up in the doctor’s office or emergency room.
Part of the problem is that you can’t pay through Healthcare.gov – which really means that despite what everyone has said, you can’t actually buy insurance through Healthcare.gov. Wasn’t that the point? Apparently not.
Here’s Sebelius Wednesday, discussing how you make the purchase: “You make it through an insurance company — you don’t pay the federal government. We are the sign-up site, and you make the payment directly to the insurer.” It’s as if Amazon.com referred you to the book publisher’s website to finalize your purchase.
Rep. Michael Burgess (R., Texas) raked her over the coals for this dysfunctional method of finalizing your payment:
Burgess: Do you know how hard it is to actually make that payment, hold your billfold out and actually make that payment? Have you done that yourself?
Sebelius: I have not.
Burgess: Well I’ll tell you, it’s almost impossible. I’ve never seen a business where you get to the point in the fundamental business transaction where you’re gonna make the payment, and you can’t do it. That is a flawed system.
Several readers told me they’ve called the insurance company in an attempt to pay, only to find the insurance company hasn’t received the records from the government yet.
We are witnessing one of the all-time Charlie Foxtrots, if you catch my drift.
Serious question: How many folks signed up and somehow don’t think they have to pay? Our Eliana Johnson:
In Durham last month with Obamacare navigators, I sensed not elation at the law’s passage but a general sense of confusion that may help to explain the poll’s finding. “I have to tell people all the time, ‘It’s the Affordable Care Act, not the Free Health Care Act,’” one navigator told me. The same navigator said the consumers who come to him are largely unaware that they will have to pay a penalty if they choose not to purchase insurance.
I have long suspected that the lowest of low-information voters liked health-care reform because they believed it meant somebody else would pay for their health care.
At least 5 million people have lost coverage due to policies being cancelled thanks to ObamaCare. So that 365,000 number is insignificant compared to that. There will no doubt be more uninsured on January 1 than there were on October 1. Don’t let them get away with pretending “1.2 million people who didn’t have insurance have it now!”
Obamacare is going to rank with one of the all-time self-inflicted national wounds, right up there with Prohibition.