No one has paid for coverage on Covered California yet, broker says

Covered California, which on Wednesday announced 59,000 enrollments had been completed up to Nov. 12, just started transacting enrollment information to insurers at the beginning of November. One broker thinks it's likely that no consumers have paid for plans yet.

“I know because I talk to [carriers] every day,” says broker MD Sam Smith, president of the California Association of Health Underwriters and president of Encino, Calif.-based Genesis Financial and Insurance Services. “If the data transmission is successful on [or around] November 15, how long will it take the carriers to upload information, establish a person’s account, generate a bill and receive a payment?” He says the exchange had originally estimated that transactions to insurers would begin Nov. 15 and that the first bills will go out around Dec. 1 — and then need to be returned with payment.

Dana Howard, spokesman for the exchange, confirmed that 834-forms — the messages sent from Covered California to the insurers with consumer information — were sent starting Nov. 4. He also counters Smith's claim about bills not going out: "Plans are currently sending out bills." Howard was not able to name the carriers that have sent bills or how many may have already received payment.

Michael Lujan, who served as director of sales and marketing at Covered California until August, confirms that to the best of his knowledge the dates Smith outlined were always the plan.

“Those enrollment numbers are highly, highly suspect,” Smith says. He’s even more concerned given President Obama’s announcement Thursday that insurance carriers can choose to renew plans that were canceled due to the law.

Punting the football

“It’s a political football that was kicked into the insurance commissioner’s end zone,” he says. “The California insurance commissioner has the tough job. I don’t see how he can go back to the carriers and say the deal’s off.” Smith thinks carriers will ultimately have to say no. “They have actuarial assumptions out there that won’t hold water if those [canceled] plans are extended past Dec. 31,” he says.

Lujan concurs that carriers, too, are in a tough spot: “What I’m thinking about California is that the carriers are probably freaking out. The simple fix is not so simple.” Louisiana agent Robin Frick explained to EBA Thursday that most carriers have probably already taken the canceled plans off the table with their respective state boards.

When U.S. Department of Health and Human Services Secretary Kathleen Sebelius announced enrollment numbers Wednesday, she also declined a reporter request to disclose federal calculations of the number of consumers who have paid for plans nationwide.