Dec 18 Insurance companies are struggling with a
new request by the Obama administration to make sure people
receive medical benefits under healthcare reform come Jan. 1,
even if they miss a sign-up deadline set for next Monday.
The government has sought to reassure consumers, already
frustrated by technical problems that stalled access to its
HealthCare.gov enrollment website in October and November, that
those who need coverage starting on New Year's Day will be able
to sign up.
Last week, the administration appealed to the insurance
industry to accept people who sought benefits past the Dec. 23
enrollment deadline for Jan. 1, and to consider approving
retroactive coverage for consumers who signed up during the
month of January.
So far, the answer has amounted to a big "maybe."
Insurers are worried that some consumers will sign up for
retroactive January plans only if they have incurred a hefty
medical bill. It is unclear what the costs of that would be or
how many shoppers might take advantage of the policy.
"It creates a situation where someone might be able to apply
for insurance when they have already had services" such as in
the emergency room, said Mary Beth Chambers, spokeswoman for
Blue Cross Blue Shield of Kansas. "It's like calling for
homeowners insurance when your house is already on fire."
Chambers said that such cases would probably be "few and far
BCBS of Kansas, the largest insurer in a state where about
14 percent of the population is uninsured, has decided to give
people until Jan. 10 to pay their premiums and receive
retroactive coverage beginning Jan. 1. They are still hewing to
the Dec. 23 enrollment deadline while they study the feasibility
of allowing retroactive sign-ups as late as Jan. 31.
Some of these changes and the technical problems associated
with the rollout of the Affordable Care Act, commonly called
Obamacare, could lead to people facing a gap in coverage next
month. It could also create new political problems for President
Barack Obama over his signature domestic policy, which
opposition Republicans have tried to derail for years.
EXTENDED PAYMENT DATE
Aetna Inc, one of the biggest players on the
exchange, is going to extend the payment date until Jan. 8, make
service workflow changes to support the deadline shift to Dec.
23 from Dec. 15 and already planned to ensure customers will not
miss important appointments, such as cancer treatments. But it
said some of the administration's suggestions would require
systems changes and more service support people, which was not
"We are concerned that changing the rules at this late date
and allowing for this degree of variability will lead to
significant consumer confusion about the marketplace," Aetna
spokeswoman Cynthia Michener said.
Cigna Chief Executive David Cordani said the company
will decide this week which measures to pursue. The company,
which has only a small business catering to individuals, said
that its employer-based plans already offer similar programs to
ensure continuity of coverage.
Other insurers, including Molina Healthcare Inc
which is selling Obamacare plans in 9 states, have said they
will be extending the payment deadline but are stopping there.
The request has raised concerns among some Wall Street
analysts over a steady stream of changing regulations. Moody's,
which reviews credit ratings of companies, said the additional
conditions are a negative influence on insurers' business,
requiring administrative changes to track new customers, and
will be confusing for doctors and consumers.
ENROLLMENT INCREASES BUT STILL LOW
Enrollment in Obamacare plans has picked up in December, due
to fixes for HealthCare.gov, which serves 36 states, and as
consumers nationwide anticipate the Dec. 23 deadline for Jan. 1
benefits. The Congressional Budget Office has estimated that 7
million people will sign up for coverage by the time enrollment
for all of 2014 ends on March 31.
But the pace of enrollments so far - 365,000 people by the
end of November - has cast doubt on the government's ability to
reach that many people in the program's first year.
Wall Street analysts have lowered their estimates for
enrollment to almost half the CBO estimate, or less. Insurers
have tempered their expectations as well. For the larger players
like Aetna, WellPoint and Humana, the exchange
market is just a fraction of their total membership, which range
from more than 10 million people to 40 million at UnitedHealth
More than 150 million people receive insurance through their
employers and 100 million others have health coverage through
government programs - Medicare for the elderly and Medicaid for
Brian Hale, a senior vice president for health policy at
Jackson Hewitt Tax Service in Nashville, Tennessee, said that he
believes the number of people trying to sign up for Jan. 1
Obamacare coverage is a fraction of the 10 to 20 million people
in the market for individual insurance this year.
Out of that, the number who may be truly displaced is "a
much smaller number of people then it's been made out to be,"
Ron Williams, the former CEO of Aetna who now advises
private equity firm Clayton, Dubilier & Rice, said he believed
insurers could allow for retroactive coverage for a few more
days in January and still mitigate the risk of high costs.
"There is some risk there; it is a limited risk," Williams
Funding under the healthcare law may help cover some of that
risk, or the costs that come when very sick people sign up at a
disproportionate rate versus healthy people.
Vantage Health Plan in Louisiana is planning to extend the
deadline for people to enroll for Jan. 1 coverage, but has not
decided how long to do so, according to Billy Justice, Vantage's
marketing and sales director.
Justice said that the law prohibits insurers from denying
coverage to someone with a prior illness "and there should be
risk adjustments at the end of the year for insurance companies
that get the highest risk."