Next test for health law: Keeping people insured

WASHINGTON -- Millions have signed up for new health-care plans under the Affordable Care Act. 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 new health-care law.

According to early independent estimates, one-fourth to one-third of the 8 million people who signed up for coverage on the ACA exchanges had been uninsured. Millions more, including some previously uninsured, got individual and family coverage outside the insurance marketplaces.

So far, 80 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 PricewaterhouseCoopers' 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 that many of the newly insured don't completely understand 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 to 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 is already making 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 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 -- and this 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 Health Link's decision to extend open enrollment through April 30, Kofman said this week. Those 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.

PricewaterhouseCoopers' 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."