Health Care In The States

Why Some Don’t Pay Their Obamacare Premium: It’s Not What You Think

By Lisa Aliferis, KQED

April 2nd, 2014, 12:51 PM

A new analysis finds that many people who signed up for a Covered California health insurance exchange plan are likely to drop the coverage for a good reason: They found insurance elsewhere.

Researchers at the U.C. Berkeley Labor Center released estimates Wednesday showing that about 20 percent of Covered California enrollees are expected to leave the program because they found a job that offers health insurance. Another 20 percent will see their incomes fall and become eligible for Medi-Cal, the state’s insurance program for people who are low income.

In addition to the 40 percent of enrollees who move to Medi-Cal or job-based insurance, between 2 and 8 percent of those who sign up for Covered California are estimated to become uninsured, the analysis noted.

This process — “churn” to those who study health insurance — is well-known in the Medi-Cal and individual insurance market.

According to the report between 53 and 58 percent of Covered California enrollees are expected to stay in a Covered California plan for 12 months. This analysis is consistent with a Kaiser Family Foundation study published earlier this year. It found that of people who enrolled in an individual insurance plan in 2010, years before the health law fully kicked in, only about 48 percent were still in the individual market two years later. (Kaiser Health News is an editorially independent program of the foundation.)

The question of how many people have paid their premium has become a political issue, with questions being raised about the true enrollment in an ACA plan. But Ken Jacobs, chair of the Labor Center and an author of the new study, said that even 15 percent non-payment of premiums “was not a surprising number.”

He said that according to the analysis, in any 3-month period, an estimated 10 percent of enrollees could be expected to leave Covered California, although he says that indeed some may leave the exchange “because the cost was too high.”

On Monday, Peter Lee, executive director of Covered California said 87 percent of enrollees had paid their premium.

Jacobs’ team also estimated churn in the Medi-Cal program. They predict nearly 75 percent of enrollees will stay in Medi-Cal for a 12-month period; about 16 percent will become eligible for Covered California due to an increase in income; and about 10 percent will land jobs that offer health insurance.

Prior to the Affordable Care Act, the study showed, 55 percent of Medi-Cal enrollees stayed in the program for 12 months. The authors noted that the Medi-Cal population was expected to be more stable because, under the ACA, re-enrollment in the program happens every 12 months instead of every 6, and the process is more automated.

In calculating their estimates, the researchers relied upon data from the Survey of Income Program and Participation from the U.S. Census Bureau. “This policy brief predicts a significant level of churn out of Medi-Cal and Covered California each year,” the authors noted. “Enrollment in Medi-Cal and Covered California will be dynamic as Californians move in and out of coverage.”

In addition to the 40 percent of enrollees who move to Medi-Cal or job-based insurance, between 2 and 8 percent of those who sign up for Covered California will become uninsured, the analysis noted.

Yet just as people will move out of Covered California and Medi-Cal, other people will move in. While open enrollment in Covered California ended on Monday (with a grace period until April 15 for people who had tried to enroll, but could not for technical reasons), many people are expected to sign up if they experience a life event that triggers a “special enrollment period.” These events include divorce, marriage, birth of a baby or loss of job-based insurance.

“Consequently, it will be vital for the enrollment infrastructure—from outreach, to the web-site, to in-person and call-center assistance—to be available and active even outside of open enrollment periods,” the authors said.

Medi-Cal does not have enrollment periods. Sign ups can happen at any time during the year.

This story is part of a collaboration that includes KQED, NPR and Kaiser Health News.

10 Responses to “Why Some Don’t Pay Their Obamacare Premium: It’s Not What You Think”

  1. george says:

    Wishful thinking by a 19th century Neanderthal Republican Party that hates working poor people and is trying as hard as they can to make sure that they never get access to affordable healthcare coverage. America is the wealthiest nation on earth and it still has nearly 17 percent of its population without health insurance and a Republican Party that’s proud of that fact! Disgusting and disgraceful!

  2. george says:

    Why do Democrats keep saying Republicans have no ideas when it comes to healthcare reform? They do! Simply look at the plan proposed by the ultra-conservative Heritage Foundation to counter Hillarycare. Obamacare is virtually an exact copy of that Heritage Foundation (mandated) plan. Romneycare is virtually an exact copy of that Heritage Foundation (mandated) plan. Republicans do have an idea about healthcare reform. It’s called mandated health insurance. Same as Obamacare. Sadly, Republicans refuse to admit it!

  3. James L says:

    My son fits this exactly. He is 28 years old, lost his job in September and signed up on the first weeks of October when no one else could. He followed through to make sure he got a bill. Paid the bill. In march he wondered why his coverage only showed dental coverage. He learned that the amount he paid was $8.00 short, that he had been “branded” and excluded from the exchange until the next open enrollment. I put him in touch with a Navigator in his state who told him that the $8.00 was an illegal fee and besides, the company should have given him three months to pay.
    Meanwhile he got employment based insurance and never followed through with his exchange coverage.

  4. Edward says:

    Republicans do not want people to not have insurance. Maybe you liberals feel it is fine to tell a 60 year old man that his plan must cover birth control, abortion and pediatric vision care, but we do not. One size does not fit all. Identify the problems, study them, then propose workable solutions to those one at a time. You don’t slam in a mess like NObamacare.

  5. MIke Danger says:

    Sorry but the math doesn’t add up. There simply isn’t enough money in the galaxy to provide healthcare to everybody in the country. The best system is to provide an equal opportunity to earn healthcare. The so called ACA is raising premiums and deductibles for working people in order to provide healthcare for the poor and is unsustainable.

    If the majority of the claimed 7.1 enrollment’s are poor or elderly than costs are going to skyrocket. We could see double-digit increases in costs next year as a result.

    If we go back a couple of decades we can look at a healthcare system that worked. The Federal Government was not involved and people had more choices. If we continue on our present course will be suffering the same economic problems as the Greeks, French, Italians, etc. with their quasi-marxist solutions.

  6. Greg says:

    Some people do not use all the factors when doing math. In case you have not noticed premiums have already been going up at rate way past inflation prior to Obamacare. Your premium has always included the cost to cover all the freeloaders that use the same ER and hospital facilities that you use at no cost. Worse, these freeloaders don’t get routine prevention medicine so they wind up costing more in the long run. Either way, we foot the bill. The only question is do you want to manage the freeloaders and charge them what they can pay (every little bit helps us) or go on paying skyrocketing premiums without doing anything to try and control the costs?

  7. Rick says:

    Any intelligent republican would tell you that it is absoutely a bad thing for all of us when a large portion of the population goes uninsured. When the uninsured inevitably experience illness or injury and undergo treatment, the hospital has to absorb that cost, and so the cost of healthcare gets bumped up. So eventually this comes back to consumers who have to pay those bumped up healthcare prices. A largely uninsured population is a really bad thing. Everyone (republican and democrat alike) should see this.
    What republicans don’t like is a bloated government like the one we have now, with its hands extended into the nooks and crannies of (what used to be) private industries. Obamacare might be bringing insurance to those who previously could not afford it, and while that in itself is a very good thing, when you look at it big picture, things are no different than when these individuals were uninsured in that tax payers still eat the cost. The only difference is that they might now be more inclined to seek medical attention when it’s needed, because they’re covered (which, again, is a good thing).

  8. evan says:

    Actually, Heritage’s plan was not Obamacare or Romneycare? Huh? What are you smokin’?

    Dude, to find the truth, you need only do a web search for…

    “Original 1989 document where Heritage Foundation created Obamacare’s individual mandate”

    Don’t tell me, you’re a tea party wacko, right?

  9. Ellen says:

    Although a certain amount of churn is expected over and above that which occurred prior to the ACA, at the end of the day the real litmus is how many people actually received coverage that otherwise would not. The lowering of the threshold for Medicaid seems to be the real influencer in that regard, given the high percentage of those who enrolled through the HIXs ended up qualifying for it. The rest, as we have been told, we will have to wait until the analysts have had a chance to parse the numbers.