By Rebecca Adams, CQ HealthBeat Associate Editor
December 18, 2013 -- America's Health Insurance Plans (AHIP) said last week that many insurers throughout the nation are willing to provide retroactive coverage to people who enroll in the new marketplaces as long as the consumers pay by Jan. 10.
But insurance exchange directors in states that are running their own marketplaces often have different deadlines, and they said they would keep them, making the insurance industry announcement somewhat less sweeping and giving rise to the possibility of confusion among consumers.
It is in the interest of health plans to give consumers a few more days to pay their premiums. Insurers want to have as many customers as possible, particularly healthy ones. Some insurers, such as CareFirst BlueCross BlueShield, are even allowing payment until the middle of the month in states such as Maryland.
But health plans also want the experiences of their new customers to go smoothly, and it will be hard to handle the influx of new customers in a short time frame.
The pay-up deadline the Centers for Medicare and Medicaid Services (CMS) set in an interim final rule was Dec. 31 for consumers who want coverage starting Jan. 1, but the Obama administration had asked insurers to give consumers more time, and many plans are relaxing that a bit.
Not necessarily the states. "National trade [association] press releases are interesting. Health care is local," said Peter Lee, the executive director of Covered California, the marketplace in that state. "Consumers in California need to have paid by Jan. 6."
"We're going to stick to those due dates," said Kevin Counihan, the CEO of Access Health Connecticut, on a call with reporters.
Some state marketplaces, such as New York's, already allow a grace period until Jan. 10.
In the federal exchange, if consumers sign up and select a plan but do not pay a premium, they'll have to pay out of pocket if they get any medical care before making their premium payment. But the plans that agree to take payment later are agreeing to reimburse the cost of services if the patient submits the premium before Jan. 10.
AHIP spokesman Robert Zirkelbach said the trade association had heard from many plans around the nation about the change.
"While every health plan will make their own decision, we have heard from health plans all across the country, including the members of our board, who are extending the deadline to January 10," he said in an email.
The 38-member AHIP board includes a variety of insurers across the nation, including several plans linked to the Blue Cross and Blue Shield Association that offer plans in the individual market.
The varying deadlines in different states and by different insurers could be confusing to consumers, but industry officials said they wanted to be flexible in response to requests from the administration.
"Our community is taking an important step to give consumers greater peace of mind about their health care coverage," said AHIP President and CEO Karen Ignagni.
Pressure on Insurers
Health insurers were under pressure from the Obama administration to allow more time. Federal officials have threatened that insurers who don't do more to help with the launch of new coverage in January could face a tougher time getting approved to offer coverage in the marketplace next year.
Insurers are less likely to take other steps that federal officials requested. The administration also asked health plans to temporarily refill drugs that are not on their formularies. And they asked plans to cover out-of-network providers during the month of January.
Health plans have built their business strategies and IT systems around covering certain medical providers and paying for drugs according to their formularies. Adjusting all of that quickly for a short period of time would be difficult, said some health industry officials who were asked about the proposed changes.
That's especially true now, when health plans are scrambling to use new payment processes with the federal government, enroll customers and launch new plans.
Wellpoint Inc. will extend the deadline until Jan. 10, said spokeswoman Jill Becher. But the company will not let all new members continue seeing out-of-network medical providers or refill drugs that the plan doesn't cover on its formulary.
Instead, Wellpoint will keep doing what it and many other big insurers have done for years. People who are signing up may be able to keep seeing their out-of-network doctor temporarily only under certain guidelines. The temporary coverage will be available for people with serious conditions who really need to keep seeing the same specialist.
Becher said the conditions include pregnancy, chemotherapy or post-surgical care. The transitional coverage will "allow for the member to continue receiving care from an out-of-network provider for specified periods of time. These policies vary by state," Becher said.
Wellpoint officials also said it would give people that it currently covers more time to switch to a new plan if their policy is being discontinued because it doesn't comply with the health care law (PL 111-148, PL 111-152).
Some current Wellpoint members were switched to a new Wellpoint plan that does comply with the law's benefit requirements. But some of those consumers want more time to compare plans.
"For those in that situation who may be uncertain that the 'mapped' plan is best suited for their needs, they may select a different plan by the 10th of the month during the open enrollment period," said Becher in an email. "This applies to those who have not already paid their first month's premium."
Aetna Inc. a health insurer that CMS Communications Director Julie Bataille highlighted last week as an example of a plan that is being flexible because the insurer had agreed to accept payment until Jan. 8, is now agreeing to take payment until Jan. 10. But it also is not able to go as far as the administration wants in covering non-formulary drugs and out-of-network providers.
Spokeswoman Susan Millerick said that the company is doing all it can to help new customers but that the coverage will be limited to certain patients. The temporary coverage may be available for people with conditions such as pregnancy, follow-up to surgery or surgery that is done in stages, cancer treatment, and mental health or substance abuse treatment.
"Transition of care gives members time to complete a course of treatment, obtain a prescription refill and transfer their ongoing care to an Aetna network doctor," said Millerick. "Transition of care applies to specialists, mental health providers and certain other doctors who are managing the course of treatment. Treatment with the doctor must have started before the effective date of the Aetna plan."
Aetna usually limits the coverage to three months, but coverage varies depending on the condition.
Smaller health plans may not be able to allow any coverage of out-of-network providers. And insurance industry officials said that in some states, plans would need to get the blessing of state officials.
Technical Problems Persist
Health plans said in the AHIP statement that they are "voluntarily making this one-time change to the payment deadline to help protect consumers from potential gaps in their coverage caused by the ongoing technical problems with healthcare.gov. Significant progress has been made in recent weeks to improve the enrollment process for consumers, but more work needs to be done to resolve the back-end challenges, particularly those related to processing enrollment files, to ensure all consumers who selected a plan are enrolled in coverage."
CMS officials had said previously that soon after the Oct. 1 launch, about one in four enrollment reports had errors in them. For instance, about 15,000 reports of enrollments were never transmitted to insurance plans.
And another problem is "reverse orphan" enrollment reports—those that tell insurers that someone has enrolled although the federal government does not have a record of it. For a while, plans were not getting cancellation notices.
Other forms had mistakes that insurers and federal officials are still trying to clean up. Insurers don't have the authority to fix some of these problems on their own, such as incorrect Social Security numbers, inaccurate subsidy amounts or wrong geographic rating areas for customers.