Trump administration says almost 2 million fewer paying Obamacare customers after bills came due

  • 10.3 million customers were paying for their Obamacare plans for February coverage.
  • Drop-offs between sign-ups and actual enrollment are normal every year.
  • The Trump administration's way of counting the numbers is raising questions about its accuracy.
An insured patient under the Affordable Care Act receives a checkup at the South Broward Community Health Services clinic in Hollywood, Florida.
Getty Images
An insured patient under the Affordable Care Act receives a checkup at the South Broward Community Health Services clinic in Hollywood, Florida.

The number of paying customers for Obamacare plans was 10.3 million in February, nearly 2 million people fewer than the actual number who signed up for a health insurance plan sold on a government marketplace, the Trump administration said Monday.

Such drop-offs between customers who sign up for coverage and those who are paying their bills are typical for Obamacare plans.

The reduction seen this winter may have been a bit higher than the one seen in early 2016, the last full enrollment season under the Obama administration.

But the way in which the Trump administration is currently counting the drop-offs could be temporarily skewing the results in a negative manner.

The Trump administration, which is seeking to gut the Obamacare program, suggested Monday that "high costs" and "lack of affordability" of plans available under the program played a big role in the number of drop-offs this year.

The administration Monday issued a separate report analyzing customers who canceled or terminated their Obamacare coverage this year, and why they did so.

"Customers are sending a clear message that cost and affordability are major factors in their decision to cancel or terminate coverage," said Seema Verma, administrator for the federal Centers for Medicare and Medicaid Services, the agency that oversees Obamacare.

Out of the 12.2 million people who signed up by the Jan. 31 close of open enrollment for a private insurer's health plan through a government-run insurance exchange, 1.9 million did not pay their first month premium, which is required for enrollment in a plan to be official, or "effectuated," CMS said.

That represents a 15.6 percent reduction between the number signed up by the end of January and the number effectuated for coverage in February.

In contrast, there was a 12.6 percent difference between the 12.7 million people who signed up for an Obamacare plan by the close of open enrollment for 2016 plans and the 11.1 million effectuated enrollments as of the end of March 2016.

CMS noted in its enrollment report Monday that "on average, since 2014, more than a million enrollees have dropped their coverage before the end of the plan year." Obamacare plans began taking effect in 2014.

The report said, "[I]t is significant to note that the 10.3 million reported today falls below projections [by the U.S. Health and Human Services Department] for annual 2017 effectuated enrollment." HHS had estimated last fall that 11.4 million people would have effectuated enrollment this spring.

Charles Gaba, who runs the Obamacare tracking site, pointed out Monday that CMS's report uses March 15 as the cutoff date for reporting the number of effectuated enrollments for coverage for February 2017.

Gaba in a Twitter message wrote, "policies signed up for after 1/15 didn't start until March."

In fact, for a customer to have health coverage in effect by the following month, they must sign up for a plan by the 15th of the prior month. The last two weeks of open enrollment, as the last two weeks of January were, tend to see sharp spikes in sign-ups by customers.

Last year, in its comparable report on effectuated enrollment for 2016 plans, CMS used March 31 as the cutoff date, and the report was for plans effectuated for March, not February. In 2015, CMS also used March 31 as a cutoff date for effectuated plans.

CMS, in a press release issued Monday, said the number of effectuated enrollments for this year "will be adjusted for individuals who effectuate their coverage for March 2017."

Gaba, in a post on his blog entitled "CMS appears to have ignored 500K exchange enrollees to issue misleading effectuation rate," wrote that the net drop from sign-ups to effectuated enrollments may have actually been just 11.8 percent, or "a couple of points better than prior years."

CNBC asked CMS why it had released the effectuated numbers before enrollment as of March could be included. CNBC also asked the agency whether the drop-off between sign-ups and effectuated enrollment is likely to be less steep if March's tally is included.

A CMS spokeswoman responded by saying the report is a snapshot of enrollment at a given time, and noted that the numbers tend to fluctuate over time.

Benjamin Wakana, who had been the spokesman for HHS in the Obama administration, said, "The report shows that about 85 percent of people effectuated their coverage — just like in previous years."

"That means the opposite of what the administration is implying it does: Premium increases didn't keep people from effectuating their coverage," Wakana said.

"Remember, premiums for people with tax credits went up $1 this year" after those subsidies were factored in, despite double-digit percentage increases in the retail price, Wakana said.

"The effectuation rate is especially impressive considering the Trump administration basically promised not to implement the law" in its first day in office, he said.

CMS's report did not mention the fact that the Trump administration, after assuming control of federal health agencies in January, killed media ads and ended outreach encouraging sign-ups on, the federal Obamacare exchange, for the last weeks of open enrollment. Those moves, which Obamacare defenders called "sabotage," are believed to have depressed enrollment.

In a trends report issued Monday, CMS said that customers of who "canceled or terminated coverage were less likely" to receive federal subsidies that reduced their monthly premiums "than those who have maintained coverage."

"Enrollment data also shows that consumers who canceled or terminated coverage had higher premiums than those who maintained coverage since the end of the 2017 open enrollment period or gained coverage through a special enrollment period," CMS's report said.

"On average, consumers who chose to end their coverage (1.5 million) paid $209 per month compared to $150 a month for all consumers (8.1 million) who had an active plan selection as of April 25, 2017," the report said.

According to survey data from CMS, about 46 percent of customers who canceled their coverage prior to paying their first month's premiums "cited cost as the reason for cancellation."

Another 14 percent said they obtained coverage elsewhere, 14 percent said they had a customer service or technology problem, and 13 percent said their plans was cancelled or they missed a deadline or failed to qualify for coverage.

The report also said that nearly half, 49 percent, of customers terminated their plans after paying at least one month of premiums because they had gained health coverage from elsewhere, such as through a job, or through Medicare.

Another 27 percent of customers who terminated coverage "cited cost or affordability as the reason," CMS said.

CNBC has asked CMS for data about the other reasons cited by customers for either canceling or terminating coverage.

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