The following are goals, questions to ask, important caveats, and links to further resources concerning Obamacare and its January 31 deadline to sign up or else face potential penalties.
– Select a health insurance plan that covers your or your family’s particular medical needs.
– Be sure to minimize your expected total costs, not just the monthly premiums.
– You wouldn’t buy a car with the lowest monthly loan or lease payment without considering the down payment, the gas mileage, the likely maintenance expenses, and the expected resale value.
– You wouldn’t buy a house with the lowest mortgage payment without considering the down payment, the property taxes, the insurance, and the expected resale value.
– You should take the same approach toward buying health insurance, which is one of the biggest items in a family budget.
Make Sure Your Doctors Are In Network
Make sure that your primary care physician and the specialists you need to see are “in network”.
Keep in mind that the directories or databases you see on the health insurer websites can contain errors.
According to The Wall Street Journal:
- 2.4% of all providers change addresses or other contact information every month
- 30% change their hospital or practice-group affiliations every year
- 5% change their license status every year
- 35% of provider listings contain errors
- 32% of listings are duplicates
As The Wall Street Journal noted: “Critics long have complained that health-plan provider directories are riddled with names of doctors who have died, moved, retired, changed affiliations, don’t accept that insurance or aren’t seeing new patients.”
Starting on January 1, 2016, the U.S. Centers for Medicare and Medicaid Services can fine insurers offering Medicare Advantage plans up to $25,000 per beneficiary and insurers offering marketplace sold on HealthCare.gov up to $100 per beneficiary. So over time, these insurance databases should improve in accuracy. But that would be little consolation if you select a health insurance plan in 2016 based on inaccurate provider data.
Be Careful About “Sticker Shock”: Premiums Are Just Part of Total Cost
The Obama Administration emphasizes the low cost of monthly premiums. For example, President Obama said in one of his weekly addresses: “most Americans will find an option that costs less than $75 a month.”
However, the monthly premium is just part of the total cost of health insurance. A CNBC article noted that: “efforts to boost Obamacare enrollment dramatically above current levels is being hampered by the sticker shock that some would-be customers feel when they look at how much they would have to actually pay in plan premiums and deductibles relative to their incomes.”
As Jocelyn Guyer, a healthcare policy analyst at the law firm Manatt, Phelps & Phillips, notes: “consumers [should] understand the importance of looking beyond premiums to consider deductibles and other out-of-pocket costs when selecting a plan.”
High Deductible Plans
According to the Commonwealth Fund, insurance plans offered to individuals and families on the marketplaces “are far more likely than employer-based plans to require enrollees to meet deductibles before they receive coverage for prescription drugs.”
Some people prefer to pay a lower monthly premium and high deductible, while other people prefer to pay a higher monthly premium for a plan which would limit their out-of-pocket costs. For example, according to a US News article, “a recent survey from the Associated Press-NORC Center for Public Affairs Research found that more than half of Americans who are privately insured (that is, not through their employers) would opt to pay a higher premium, leading to lower out-of-pocket costs such as deductibles and copays. But 40 percent would prefer a lower monthly premium paired with higher out-of-pocket expenses.”
If you choose a plan with a high deductible, be sure to evaluate carefully the prescription drugs or services covered by the plan. According to the US News article:
“That’s something I think consumers need to think about – that all high-deductible plans are not the same,” says Katherine Hempstead, director of coverage for the Robert Wood Johnson Foundation. “A high-deductible plan can have many different manifestations depending on what is and what is not subject to the deductible.”
In some states and under some plans, things such as drugs from the pharmacy or a certain number of primary physician visits may be covered with a copay rather than applied toward the deductible. For anyone choosing between HDHP options, whether through an employer or through an exchange, education and research are key.
“Many times, in the employer-sponsored context, you have very little choice and don’t really study the plan design because your options are limited,” Hempstead says. “But in the context of the exchange, whether it’s private or public, theoretically, people really study the plan designs and need to understand and eventually use their plans a little better.”
Major Chronic Conditions
Consumers with major chronic conditions like diabetes, hypertension, high cholesterol especially need to be careful that the health insurance plan they select minimizes their expected total out-of-pocket costs. These patients typically take many prescription drugs to control blood sugar, blood pressure, and high cholesterol. For example, the average family with one member diagnosed with diabetes spends about $3,600 a year in total out-of-pocket costs.
Given their prescription drug and medical services needs, consumers with major chronic conditions need to evaluate candidate health plans based on their coverage of prescription drugs and medical services. Selecting a health insurance plan with a low monthly premium which does not provide good coverage — or any coverage at all — for the prescription drugs and medical services consumers need could end up costing more in total than other health insurance plans.
In Texas, there are about 2 million people diagnosed with diabetes and another 4 million with high blood pressure.
Estimate the Total Cost of Each Potential Health Insurance Plan
There are at least two services which can help individuals and families estimate what their total costs will be for each health plan.
The federal government health insurance exchange, http://www.HealthCare.gov, offers a tool estimating the total cost of health insurance plans based on a consumer’s expected use of low, medium, or high volume of medical services. The New York Times notes that on the one hand, according to Robert Krughoff, president of the Center for the Study of Services, “The website now has a cost calculator. That’s a big improvement.” On the other hand, Krughoff says, “it’s strange that the website does not allow you to sort plans by total costs.”9
A private company, www.savue.com, offers a service estimating and comparing the total cost of health insurance plans based on a consumer’s expected use of prescription drugs and medical services. Savue allows a consumer to enter the specific prescription drug therapy he/she expects to follow during 2016. Then it identifies the programs which can reduce the out-of-pocket cost, including insurance coverage, discounts, and tax benefits. Then it ranks health insurance plans by the expected total out-of-pocket cost.