Consumers worried that tight deadlines around the holidays and lingering computer problems could thwart their efforts to secure coverage under President Barack Obama's health overhaul will get extra time to pay, the health insurance industry said Wednesday.
The board of the industry's biggest trade group - America's Health Insurance Plans - said consumers who select a plan by Dec. 23 will now have until Jan. 10 to pay their first month's premium, instead of a previous New Year's Eve deadline set by the government.
For coverage to take effect, consumers must make sure they pay their initial premium on time.
Karen Ignagni, the group's CEO, said the voluntary decision was taken "to give consumers greater peace of mind about their health care coverage." AHIP represents more than 90 percent of health insurance companies, including the major national carriers and nearly all of the BlueCross BlueShield plans.
Wednesday's announcement does more than grant extra time.
It also reduces the risk that consumers switching plans could suffer an interruption in coverage because of technology woes still afflicting HealthCare.gov, the federal online sign-up system, as well as some state-run websites.
That's particularly important for at least 4 million people whose existing individual plans were canceled because they did not meet standards under Obama's law. Disruptions in coverage for those consumers could trigger another round of political problems for the president and beleaguered Health and Human Services Secretary Kathleen Sebelius.
Back in 2009, Obama had promised that people who liked their insurance would be able to keep it under his health overhaul plan. But that guarantee was shredded by the wave of cancellation notices, which crested right around the same time that HealthCare.gov was refusing to function for millions of potential customers. Obama's poll ratings took a nosedive.
Under the industry announcement, consumers still must select a plan by Dec. 23 - next Monday.
But instead of having to pay their first month's premium by New Year's Eve, they now have until Jan. 10. That would let them have coverage retroactive to Jan. 1. Patients who get a pharmacy or medical bill during that period can later submit it to the insurance company for payment.
Insurers have complained that a significant number of the enrollments they have gotten from HealthCare.gov have problems that could prevent a consumer from getting covered on Jan. 1. That includes missing or incomplete information, duplicative entries and garble. The administration says its technical experts are aggressively tackling the problems, and that errors have been cut dramatically. But insurers say useless or corrupted files are still getting through. Government and industry are working together to clean up the records.
Without the extra time granted Wednesday, a consumer who paid in early January would have had to wait until Feb. 1 for coverage.