1 in 5 new enrollees didn’t pay premium

Missed deadline means no coverage

WASHINGTON - One in five people who signed up for health insurance under the new health-care law failed to pay their premiums on time, and therefore did not receive coverage in January, insurance companies and industry experts said.

Paying the first month’s premium is the final step in completing an enrollment.Under federal rules, people must pay the initial premium to have coverage take effect.

In view of the chaotic debut of the federal marketplace and many state exchanges, the White House urged insurers to give people more time, and many agreed to do so. But, insurers said, some people missed even the extended deadlines.

In Arkansas, Arkansas Blue Cross and Blue Shield and its national affiliate, the Blue Cross and Blue Shield Association, gave customers until the end of January to pay their premiums for coverage with Jan. 1 effective dates.

Cal Kellogg, executive vice president and chief strategy officer with Arkansas Blue Cross and Blue Shield, said Jan. 29 that 95 percent of the 6,100 people who had signed up for coverage with one of the two companies starting Jan. 1 had paid their premiums at that time.

Little Rock-based Qual-Choice Health Insurance gave customers until Jan. 10 to pay their January premiums. Mike Stock, the company’s chief executive, has said that about 60 percent of the 1,100 people who signed up for Jan. 1 coverage with the company paid their premiums on time.

Those customers could still pay their premiums after the deadline, but their coverage would go into effect at a later date, depending on when the payments were received, company spokesman Christy Garrett has said.

St. Louis-based Centene Corp. is also offering plans on Arkansas’ exchange. Company spokesman Deanne Lane didn’t return a call seeking comment Thursday.

Lindy Wagner, a spokesman for Blue Shield of California, said that 80 percent of the people who signed up for its plans had paid premiums by the company’s due date, Jan. 15. Blue Shield has about 30 percent of the exchange market in that state.

Matthew Wiggin, a spokesman for Aetna, said about 70 percent of people who signed up for Aetna health plans paid their premiums. For Aetna policies taking effect Jan. 1, the deadline for payment was Jan. 14, and for products sold by Coventry Health Care, which is now part of Aetna, the deadline was Jan. 17.

Mark Bertolini, the chief executive of Aetna, said last week that the company had 135,000 “paid members,” out of 200,000 who began to enroll through the exchanges.

“I think people are enrolling in multiple places,” Bertolini said during a conference call with securities analysts. “They are shopping. And what happens is that they never really get back on HealthCare.gov to disenroll from plans they prior enrolled in.”

Kristin Binns, a vice president of WellPoint, one of the nation’s largest insurers, said 76 percent of people selecting its health plans on an exchange had paid their shares of the first month’s premiums by the due date of Jan. 31.

Binns said the company had received more than 500,000 applications for individual coverage through the exchanges in 14 states.

Julie Bataille, a spokesman for the Centers for Medicare and Medicaid Services, which runs the federal exchange and supervises state marketplaces, said the government did not know how many people had paid their premiums and thus “effectuated” coverage. But in interviews and in the quarterly reports on their financial performance, insurers provided data indicating that four-fifths of applicants had met payment deadlines.

One big company, Humana, said it had received 200,000 applications for insurance through the exchanges.

“About 75 percent of the people paid, and 25 percent did not pay,” said Thomas Noland Jr., a senior vice president of Humana.

Customers had until Jan. 31 to pay for coverage that took effect on Jan. 1.

Greg Thompson, a spokesman for the Health Care Service Corp., which offers Blue Cross and Blue Shield plans in Illinois, Texas and three other states, said that “around 80 percent” of people choosing those plans had paid their first month’s premiums by the Jan. 30 due date.

Local and regional health plans are sometimes more effective in contacting consumers.

Elizabeth Williams, a spokesman for Independence Blue Cross in Philadelphia, said the company had extended the payment deadline to Jan. 28, then extended it again to Feb. 15 and made many phone calls urging people to pay.

“As a result,” Williams said, “we have received payment from 84 percent of our customers who purchased Independence Blue Cross health plans on HealthCare.gov - 84 percent of the 27,528 people who enrolled through the federal marketplace in Independence Blue Cross health plans with coverage effective Jan. 1.”

Scott Keefer, a vice president of Blue Cross and Blue Shield of Minnesota, said 95 percent of people who signed up for coverage starting Jan. 1 had paid premiums by the deadline of Jan. 10. The company, he said, made aggressive efforts to contact consumers and remind them that they needed to pay.

That effort was feasible, he said, because the website of the Minnesota exchange had technical problems that kept enrollment well below expectations. The federal government reported this week that fewer than 30,000 people had signed up for private health plans on the Minnesota exchange from October through January. Blue Cross and Blue Shield had one-quarter of the market.

People could have many reasons for not paying their premiums. Some decided they did not need or want health plans for which they had applied. Some never received an invoice from the insurance company or received it late. In addition, phone lines of some health plans were overwhelmed.

Obama administration officials said they did not know how many people signing up for coverage had paid their premiums because the government has not finished building the “back end” of the computer systems needed to pay insurers.

“As soon as we have our automated payment systems complete and tested, we believe that we’ll be able to provide you some additional data in terms of those consumers who have paid their premium,” Bataille said.

Information for this article was contributed by Robert Pear of The New York Times and by Andy Davis of the Arkansas Democrat-Gazette.

Front Section, Pages 1 on 02/14/2014

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