Almost nine out of every 10 Kansans and Missourians who selected health insurance on the federal online marketplace paid for at least the first month of their coverage this year, offering one bit of stability in the sometimes-turbulent marketplace.
Critics of the Affordable Care Act, also known as Obamacare, questioned whether people who signed up for coverage actually would pay their premiums after the exchanges’ troubled rollout in late 2013 and early 2014.
Data from 2015 and 2016 suggest most people who sign up for insurance through the marketplace do pay their premiums, at least early in the year. The online marketplaces at www.healthcare.gov were created as part of the health reform law to provide increased access to health insurance.
Whether people pay their premiums matters because insurers only make money — and stay in business — if they collect more from customers than what they pay when those customers receive health care. Some insurers have chosen to stop selling policies on the marketplace because it tends to attract sicker customers than they had planned for, and other insurers have asked for substantial premium increases.
In Kansas, 89,566 people had paid their marketplace premiums as of March 31, according to the Centers for Medicare and Medicaid Services. That accounts for about 88 percent of the 101,555 Kansans who selected a plan for 2016.
Sign-ups ended in early February, meaning March was the first month when everyone who signed up during regular enrollment had to pay a premium.
In Missouri, 252,044 people had paid as of the end of March, or about 87 percent of the 290,201 who enrolled.
Those rates are slightly higher than what is typical in the individual insurance market, according to Dylan Roby, an assistant professor at the University of Maryland School of Public Health who studies insurance markets.
Usually, about 80 percent to 85 percent of people who seek individual coverage pay, though those rates are much higher among people with employment-based coverage, he said.
“The tax credits and cost-sharing subsidies (in the marketplace) help ensure the premiums are affordable for people on the lower end of the income spectrum,” he said, and encourage them to maintain their coverage.
A higher rate of customers dropping coverage becomes a problem only if it leaves insurers with a pool of people who are more expensive to cover and fewer people paying their premiums, Roby said.
Insurers can’t raise marketplace premiums midyear in the way a grocery store can charge more for a gallon of milk, so if too many healthy people drop out they have to absorb costs until they are able to set new premiums the next year.
Both Kansas and Missouri were near the middle in terms of the percentage of enrollees who paid for their insurance. Nationwide, about 11.1 million of the 12.7 million people who enrolled in the marketplaces still were paying their premiums as of March 31, for a payment rate of about 87 percent. State rates ranged from a low of 66 percent in Virginia to a high of nearly 97 percent in Massachusetts.
CMS didn’t track why some people didn’t pay their premiums, so it isn’t clear whether they were unable to afford coverage, decided they didn’t want to pay anymore or gained coverage through an employer or another source, such as a new spouse’s insurance.
About 17,000 of those who weren’t included as of March 31 were dropped due to the problems verifying their immigration status, according to CMS. People who aren’t citizens or legal residents can’t buy insurance through the marketplace.
Sheldon Weisgrau, director of the Health Reform Resource Project in Kansas, said some people may have received the care they needed and quickly dropped their insurance, but most people who aren’t paying likely have lower incomes and struggle to afford coverage. While that may not affect the marketplace much, it could leave people unable to pay for care they need, he said.
“It raises concerns in the sense that there are people losing their insurance for one reason or another,” he said.
Megan Hart is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team. You can reach her on Twitter @meganhartMC
