ACA Billing Challenges
Board: Macro Economics
I hope the reader will allow me to point out what I think are some Macroeconomic Risks (MERs) associated with billing and collection of premiums under the ACA. In the interest of full disclosure, please note that I am in favor of quick and universal implementation of the Affordable Care Act (ACA), rather than allowing the country to remain in "healthcare limbo." I believe there are some issues the implications of which will not be known until the ACA is fully implemented and enforced.
These issues may have been discussed in Congressional Committee meetings dealing with implementation of the ACA, but I have heard little from the media or from Congress discussing the following realities about billing, collections and human nature, all of which are part of the macroeconomic picture right now:
1. Some of the uninsured do not have checking accounts or credit cards.
2. Some of those who are among the 47% who reportedly have never heard of the ACA also do not have checking accounts or credit cards.
3. Some of the uninsured are also unemployed or underemployed with very little income.
4. Some of those who would qualify for ACA premium subsidies do not have checking accounts or credit cards.
5. Some of those who would qualify for ACA premium subsidies have incomes so low that they are not required to file tax returns.
6. Some Americans with low incomes (as well as a lot of folks with high incomes), even if they have checking accounts or credit cards, do not balance their checkbooks or pay their credit cards on time.
7. Some of the uninsured have poor credit or no credit.
8. Some of the uninsured have trouble paying their existing bills on time.
9. Some Americans who are presently insured have never had to pay a monthly health insurance premium on their own, since their health insurance premiums have either been paid by their employers or collected by their employers as a deduction from their paychecks.
10. Some Americans who previously have had optional health insurance available through employer-deducted premiums may find their employers electing to discontinue the premium-deduction option, rather expecting their employees to purchase health insurance through ACA exchanges.
11. The premiums for health insurance purchased through the ACA exchanges must either be paid for by check, by deduction from a checking account or by credit card.
12. ACA premium subsidies are only available to persons who actually pay health care premiums.
13. Penalties for failure to purchase health insurance are going to be collected by the IRS when a person files their income tax return.
14. Some of those who sign up for health insurance through ACA exchanges will fail to pay their premiums - by failing to mail in their premium checks on time, by having insufficient funds in their checking accounts or by being over the limit on their credit cards.
15. When faced with prioritizing which bills get paid from small paychecks or from government assistance, some Americans will consider food, rent or utilities more important than their self-paid health insurance premiums.
16. Health insurance companies will cancel policies if premiums are not paid.
17. Among those who purchase health insurance through ACA exchanges, those with pre-existing conditions, higher risks and greater need for healthcare (i.e. - older Americans) will be more likely to pay their premiums in a timely manner, regardless of income.
18. Among those who purchase health insurance through ACA exchanges, those who are younger or with less need for healthcare will be less likely to pay their premiums in a timely manner.
19. Based on observation and experience, I personally think that many of the young and the uninsured will tend to consider their cell phone bills and cable or satellite TV bills more important than paying health insurance premiums (and possibly even more important than filing their tax returns and paying taxes).
20. Based on observations and experience standing in line behind people at the cell phone store or at the cable company, many of the young and others who form a substantial number of the uninsured pay their cell phone and cable TV bills in person with money orders, cash or prepaid debit cards - sometimes past due and only in order to "get their cell phone reactivated" or the "TV turned back on."
Given the above realities, I expect that health insurance premium collection will be a major problem in realizing all the benefits of the ACA. In addition, keeping younger, healthier American enrolled (as is necessary in order to keep older Americans' premiums low) will be a major problem in the future - especially among the younger unemployed or underemployed.
Whether the ACA will succeed or fail depends upon billing and collection, which in turn depends upon whether Americans are capable of budgeting and balancing a checkbook.
Billing and collections are ultimately going to decide whether health insurance companies will be able to offer reasonable rates on an ongoing basis without regard to pre-existing conditions.
The sooner the ACA is implemented, the sooner we will find out how human nature, balancing a checkbook and filing tax returns all affect the macroeconomic reality of healthcare in America.
I think all of the above are Macroeconomic Risks associated with the ACA, but have had little or no coverage in the media or by members of Congress in their communications with the public.
But then, what do I know?