This is Big

Millions of horror stories are right around the corner.

About 5 ½ million people will lose health insurance coverage on Jan 1st. But insurers are reporting that only 5% to 15% of those who have signed up in the exchanges have actually paid the first month’s premium. December 15th was the original deadline for Jan 1st coverage. Kathleen Sebelius thinks she has the authority to tell insurers to extend the deadline to Dec 31st. She is asking insurers to voluntarily extend the deadline well into January.  Unless the insurers oblige, it appears that several million people will have a gap in their coverage come January. The administration is obviously very worried about the bad publicity that will result. So it is asking insurers in the exchanges to pay medical bills they don’t really owe to prevent the patients from bearing the full cost of the gap in coverage.

In particular, HHS has:

  • Asked insurers to refill prescriptions through January if those prescriptions were covered under previous plans.
  • Asked providers and insurers to help educate people about their options if they find themselves with an insurance gap by not enrolling by Dec. 23.

Megan McArdle has a similar take on this.

Comments (16)

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  1. Perry says:

    Wow, I think the insurance companies are going to regret this law they lobbied for. It’s nice Sebelius is doing that, but really it will just make the insurance companies look like the bad guys if they choose not to comply.
    As a provider, what am I supposed to tell people their options are?
    I say call your Democratic Senator and Congressman.

    • Lucy says:

      Those insurance companies are definitely getting what they deserve for backing the law, but I’d really like to see them come out and speak out against the administration. Don’t see that happening, though.

      • Wally says:

        Of course not. What the administration is doing is helping them.

        • Jardinero1 says:

          Have you ever heard a representative of a major carrier ever speak publicly for or against a politician? That is not how they operate. They keep armies of lobbyist in every congressman’s and every state legilator’s and every agency head’s office.

  2. Jardinero1 says:

    I will address Perry’s comments which are valid considerations but which I wholly disagree with.

    I work in the insurance industry as an agent and I have to work with underwriters and billing departments and claims departments on a daily business. On a rare occasion, I meet one of the carrier bigshots at a conference or convention. This is what I know about them. They don’t care what anybody thinks in Congress or the administration. They know that everybody already hates insurance companies and they don’t care if they win any popularity contests. They know we need them and we are stuck with them. What they do care about is one thing and one thing only: “What are the rules?” They understand that they have a contractual duty to the insured and a legal duty to comply with state and federal regulations. They always, always ply the straightest, narrowest path between those two duties.

    So when the administration makes statements and suggestions and requests; unless such are backed by appropriate legislation and a broadly accepted regulatory statements, you can be sure that the carriers will ignore them.

    So to the question of whether they will accept premium payments in January for policies with a January 1 incept date? No.

    To the question of whether they will pay for prescriptions or claims if they have not received a premium payment by January 1st? No.

    To the question of whether they will submit a generalized statement of premium to the HHS for the subsidy payments? No.

    Will they let those subsidized policies cancel if they don’t receive the subsidy payments? Yes.

    • Wally says:

      Any corporation would do the same. Without legitimate laws backing what the administration says it will fall on deaf ears.

    • Perry says:

      So what I hear you saying Jardinero, is that the Insurance companies don’t care what anyone thinks and they are willing to be the fall guys for this?
      Or will they, as Lucy says speak out against the administration for this debacle?

      • Jardinero1 says:

        You are correct, they don’t care. The carriers aren’t running for office. They can’t be fall guys. The only way they can lose is if they pay claims for people who have not paid the premium.

  3. Trent says:

    I could have swore that Sebelius had unlimited power. It’s the only thing that explains why she’s still appointed

  4. Perry says:

    On a similar note, I see the statement “If you like your plan you can keep it” was voted the Biggest Political Lie of the year.

  5. Bob Hertz says:

    Note to Jardinero:

    I also am in the insurance industry.
    In the past, I have had companies accept a premium on a Jan 15 for new coverage that was effective Jan 1st, and also pay any claims that were incurred between Jan 1-15.

    That is not to let this awful rollout off the hook. There will still be many horror stories.

    But I do not think the cutoffs will be super abrupt.

    Also, and this again is a minor point, some of those five million persons who had a policy cancelled did accept a new compliant policy from their old insurer.
    I have no idea how many, though.

    • Jardinero1 says:

      If it was life, health or disability, I imagine there were some extenuating circumstances, where upon examination, the carrier decided it would be in their best interests to accept the payment.

  6. Bob Hertz says:

    Robert Lascewski states in The Health Care Blog that if payments are not received by 12/31, new enrollments will be void.

    That will be awful. Can you imagine starting over?