Practice Economics

Insurers address ACA 90-day grace period issue


Representatives of major insurance companies assured lawmakers that they have systems in place by which physicians can check whether patients newly insured through the state and federal health exchanges were up to date on payments for their premiums and thus eligible for coverage.

The insurers – Aetna, Cigna, Health Care Service Corporation, and Wellpoint – appeared May 7 before the House Energy and Commerce Oversight and Investigations Subcommittee to answer questions about how many enrollees under the Affordable Care Act’s state and federal health insurance exchanges have paid their premiums.

Rep. Tim Murphy (R-Penn.)

Rep. Michael Burgess (R-Tex.), a physician and a subcommittee member, said that he was especially concerned about the 90-day grace period that could create a situation in which care delivered by doctors is not covered by insurance companies.

The grace period was built into the Affordable Care Act.

According to the law, patients must pay their first month’s premium to be considered enrolled and verified as insured. After that, however, they have 90 days to pay the next premium. If the patient doesn’t pay for the second month, the insurer can hold or "pend" all claims. By the third month, if the patient still has not paid, the insurer can terminate the policy. The physician is left to collect from the patient whatever is owed for all outstanding claims.

The insurance company officials who testified at the hearing said that they had systems in place that gave physicians the ability to determine if a patient was current on payments and thus eligible for coverage. They did not give much detail beyond that.

Paul Wingle, executive director of individual business and public exchange operations and strategy at Aetna, said that doctors can call Aetna for updates on a patient’s payment status.

Brian Evanko, president of the individual segment at Cigna, said that physicians and hospitals can call or check online for a patient’s current insurance eligibility. J. Darren Rodgers, a senior vice president and marketing officer at Health Care Service Corporation, and Dennis Matheis, president of exchange strategy for Wellpoint, also said that their companies offered similar services for physicians to verify eligibility.

Rep. Burgess said that he still had concerns that physicians could end up delivering uncompensated care.

The insurers also said that, so far, it appears that a majority of exchange plan enrollees are paying their premiums.

Aetna enrolled 600,000 individuals by the third week in April. Of those, 500,000 have paid, said Mr. Wingle, noting that, since many enrollees have not reached the payment due date for coverage, the figure is "dynamic."

Cigna’s Mr. Evanko did not give enrollment or payment data.

Health Care Service Corporation had 830,000 applications for coverage – 600,000 on the exchanges and 230,000 from outside the exchanges, said Mr. Rodgers. In January, February, and March, 85%-88% of exchange plan enrollees had paid.

The payment rate dropped to 83% on April 1; May figures were incomplete, he said.

Mr. Matheis of Wellpoint testified that "we are seeing strong membership growth and large percentages of our newly enrolled customers are successfully paying their premiums by the due date."

He said that, overall, 70% of premiums have been paid, but that figure includes enrollees whose payments were not yet due. For those whose premium deadline has passed, the payment rate is up to 90%, said Mr. Matheis.

Rep. Tim Murphy (R-Pa.), chairman of the oversight and investigations subcommittee, said that the data submitted to the panel by insurers in late April "paints an uneven picture about the status of enrollment and payment through April 15."

A report issued by the Energy and Commerce Committee on April 30 claimed that data from insurers showed that 67% of the enrollees in the federal exchanges had paid their first month’s premium. Rep. Murphy said that the report showed a wild variation in payment rates by state, and that more information was needed.

"We recognize that many individuals still have time to pay their first month’s premium, which is why we have asked the insurers to update this information on May 20," he said.

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