Millions have signed up for new health-care plans under Obamacare. The next trick: keeping them enrolled.
With the health-care law's first enrollment period closed, health insurers, policymakers and advocates are pushing to make sure the newly insured become reliable customers for the health plans. That will be crucial to keeping down the uninsured rate and will help determine how insurers will view the individual market under the sweeping changes made by the Affordable Care Act.
According to early independent estimates, one-fourth to one-third of the 8 million people who signed up for coverage on the Affordable Care Act exchanges had been previously uninsured. Millions more, including some previously uninsured, got new individual and family coverage outside of the insurance marketplaces.
So far, 80 percent to 90 percent of people signing up through the exchanges have paid their first month's premium and completed enrollment, according to accounts from insurers and the state-run exchanges. How the payment rate holds up during the year will be closely watched.
“It’s certainly more of a challenge when it’s an individual as opposed to an entire employee group,” said Ceci Connolly, managing director of PwC’s Health Research Institute. “It’s always more challenging with newcomers who [insurers] haven’t had a chance to develop a relationship with or any kind of track record.”
Advocates say they're concerned about the newly insured's understanding of how their coverage works. About two in three adults who were likely candidates for exchange coverage said they had gaps in their understanding of basic insurance terms, according an Urban Institute survey. Advocates fear that as people use the insurance they might face out-of-pocket costs they hadn’t anticipated and could decide to drop coverage if they find it too expensive.
“We’re thinking about that a lot more here,” said Elizabeth Carpenter, a director at the Avalere Health consulting firm who is closely tracking insurers. “People need to pay their premiums the first month, and they need to keep paying the premiums.”
Exchange enrollees are allowed a 90-day grace period to keep their insurance without payment before they’re dropped from coverage. Insurers are required to pay for the first 30 days, but not the last 60 days – a policy that has doctors worried they could be left on the hook for uncompensated care. If the grace period ends without payment, the enrollee is cut off from coverage and won't have another chance to obtain marketplace coverage again until the next open enrollment period, scheduled to start Nov. 15.
"Health plans are going to help with this," said Sonya Schwartz, a researcher at Georgetown University's Center for Children and Families. "They know how to follow up with people and send them the bill. They want to keep them enrolled."
CVS Caremark, joining the effort to keep people continuously enrolled, announced this week that people can pay their premiums at its 7,600 locations for no extra cost. A company spokesman said it expects newly insured consumers who don't have bank accounts to be most likely to use the service. Research shows that millions of uninsured people don’t have bank accounts – rates are particularly high among minority groups – which could challenge their ability to pay for new coverage. About one-quarter of people expected to qualify for premium subsidies, who earn between the federal poverty level and up to 400 percent FPL, don’t have bank accounts, according to Jackson Hewitt.
The District of Columbia’s exchange, D.C. Health Link, had begun discussing how to make sure people continue paying their premiums, executive director Mila Kofman said earlier this month. Those discussions have been put on the back burner in light of the Health Link’s decision to extend open enrollment through April 30, Kofman said this week. Those who are monitoring state-run exchanges said they expect an increased focus on the retention issue in the coming weeks and months.
Kofman said that earlier in the year Health Link contacted about 600 or 700 people who had signed up for a health plan but hadn’t paid the first month’s premium. Insurers contacted the same list, she said. “That resulted in a bunch of payments,” she said.
People are likely to shift in and out of coverage during the year. Research earlier this month projected that about 20 percent of enrollees in California’s exchange are likely to obtain employer coverage during the year, and another 20 percent will qualify for the state’s expanded Medicaid program. Even before Obamacare there were high turnover rates in the individual market, with as many of half of enrollees dropping out of the individual market within two years, according to the Kaiser Family Foundation.
Insurers are also thinking about how they can keep the customers they won in the first year of Obamacare's expanded coverage. Industry observers say health plans are already interacting with new customers and slotting them into disease-management programs to build brand loyalty and increase their health profile.
Arches Health Plan, a new insurance co-op funded by the health-care law, hired a longtime consumer advocate to engage with new customers. Arches said it captured about 20 percent to 23 percent of Utah's exchange enrollees, and the co-op hopes federal health officials will make it easy for people to re-enroll with the same health plans next year.
"That scares the hell out of me — to take all the work we did last year and we have to do that again," said Arches founder Shaun Greene.
Colorado's state-run exchange is also thinking about the next enrollment period. In a letter sent last week to the Centers for Medicare and Medicaid Services, Connect for Health Colorado asked federal officials to allow existing customers to renew earlier for 2015 plans.
While the health-care law bans insurers from denying people coverage or charging them more based on medical conditions, consumer advocates say they’ll be keeping tabs on the renewal process this year to make sure insurers aren’t trying to weed out sicker customers. Georgetown’s Schwartz explained, for example, that insurers might send more renewal reminders to patients who had fewer health-care claims.
“Marketing practices can be discriminatory, and that’s scary,” she said.
PwC's Connolly said that a big question for the next enrollment period is how many existing exchange customers take their business elsewhere, either in search of a cheaper option or for access to the care providers they want.
"Some may hear from friends about better things happening in other plans," Connolly said. "Word of mouth is quite powerful in health care."