WASHINGTON - Consumers worried that tight deadlines around the holidays and lingering website problems could thwart their efforts to secure coverage under President Barack Obama’s health overhaul will get extra time to pay, insurers announced Wednesday.
The board of the industry’s biggest trade group - America’s Health Insurance Plans - said consumers who select a plan by Dec. 23 will have until Jan. 10 to pay their first month’s premium. That’s 10 extra days beyond a New Year’s Eve deadline set by the government.
The voluntary move comes as insurers and the administration try to head off anticipated problems around the first of the year, when new coverage options for the uninsured take effect under Obama’s law, and when several million people whose existing policies were canceled must switch to new plans.
Karen Ignagni, chief executive officer of the industry group, said the decision was taken “to give consumers greater peace of mind about their health care coverage.” America’s Health Insurance Plans represents about 95 percent of the industry, including the major national carriers and nearly all the Blue Cross and Blue Shield plans.
There may be a few insurers who do not follow the group’s lead, so consumers are advised to check with their carriers. Consumers must pay their first month’s premium on time for coverage to take effect.
The move burnishes the industry’s image and has no real downside, said Dan Mendelson, CEO of Avalare Health, a market analysis firm. “It’s useful for the consumer and not a problem for the plans,” he said.
Insurers will still get paid for January. “They can book the revenue, and they don’t need to worry about the cash flow,” Mendelson said.
But the announcement does more than grant extra time. It also reduces the risk that consumers switching plans could suffer an interruption in coverage because of the technology woes encountered by the federal sign-up system, and some state-run websites.
That’s particularly important for at least 4 million people whose existing individual plans were canceled because they did not meet standards under Obama’s law. Disruptions in coverage for those consumers could have negative political consequences for Obama, who had promised that people who liked their insurance would be able to keep it under his health overhaul plan.
Under the industry announcement, consumers still must select a plan by Monday. But paying by Jan. 10 would let them have coverage retroactive to Jan. 1. Patients who get a pharmacy or medical bill during that period can later submit it to the insurance company for payment.
Without the extra time granted Wednesday, a consumer who paid in early January would have had to wait until Feb. 1 for coverage.
The administration applauded the industry decision. It will “ultimately make it easier for consumers to enroll” through the new online insurance markets, said Health and Human Services spokesman Joanne Peters.
The federal healthcare.gov website is now working better, but insurers still report accuracy problems with enrollment information the government is sending that could prevent a consumer from getting covered on Jan. 1. That includes missing or incomplete information, duplicate entries and garble.
The administration has said its technical experts are aggressively tackling the problems, and that errors have been cut dramatically. But insurers said useless or corrupted files are still getting through.
Front Section, Pages 3 on 12/19/2013