News / Health

    Bargain Hunting May Lead to Fewer Health Insurance Choices

    Reuters
    Nobody wants their health benefits cut, but a funny thing happens when U.S. consumers shop for plans on their own: They buy less coverage than they had before.
     
    That “buying low” behavior observed in data collected by consulting companies like Aon Hewitt and Liazon Corp may soon happen much more often. With the start of Obamacare and corporate open enrollment seasons, millions of Americans are likely to buy their own healthcare coverage on public and private exchanges.
     
    Their choices may bring a change in what options will be offered and how much they will cost. For example, some high-end plans may disappear if they appear particularly unpopular, analysts say.
     
    Starting on Tuesday, about 7 million people are expected to buy insurance on the public exchanges created by the Affordable Care Act, but the U.S. Congressional Budget Office expects that number to rise to 24 million by 2019.
     
    Private exchanges, which mimic the public ones but are not mandated by the government, may surge to 40 million by 2018 from about 1 million currently, according to Accenture Research. They would cover almost 25 percent of the U.S. employer-provided workforce of 170 million.

    Downward spiral
     

    On Aon Hewitt's private exchange for large employers, 46 percent of roughly 100,000 people enrolled last year bought less coverage than they had previously. Over the past five years, 80 percent of customers on Liazon's exchange for small-business employees changed their coverage, with 90 percent of those choosing less-expensive plans.
     
    This was typically coverage with lower monthly premiums, higher annual deductibles and, sometimes, a smaller network of doctors.
     
    “It's about people picking what they need,” says Liazon co-founder Alan Cohen. “Companies overbuy dramatically in the area of health insurance. You quickly realize that it's inefficient to force people into one plan.”
     
    Most exchanges are now set up according to metallic tiers - bronze, silver, gold and platinum - which are based on government-approved actuarial standards. As consumers move up to more-precious metals, they will typically face higher premiums and lower deductibles and co-pays.
     
    This may mean that if people consistently pick lower-end plans, eventually the top level could go away, benefit experts say.
     
    Some insurance carriers are already forgoing platinum, says Gary Claxton, a vice president of the Kaiser Family Foundation, one of the leading groups studying healthcare reform. On the other end, there is already lobbying for a level below bronze - the “lead” level, as Claxton jokes - which would cover just 50 percent of costs, compared with 60 percent for bronze.
     
    “Within five years, I'm sure we'll have changes,” he says.
     
    Not everyone agrees.
     
    Most insurers are counting on people choosing the midlevel silver plan, which is heavily promoted, and are prepared to offer a wide range of options, says Bob Hurley, a senior vice president at eHealth Inc, which runs the private health insurance marketplace
     
    “Consumers do seem to weigh the benefits of the insurance plan, but they do not drive to the basement,” he says.
     
    While consumers look first at premiums, the value of a plan also depends on the deductible and the breadth of the network, says Richard Birhanzel, managing director of Accenture's health insurance exchange business. Those offerings may get worse even if the premium does not go up, he said.

    In the wrong plan
     
    Another worry is that if sicker consumers gravitate to the high-deductible bronze and silver plans, they may get overwhelmed with out-of-pocket costs. While there will be trained “navigators” to help people pick the plans on the public exchanges and benefits administrators to steer employees, people do not always listen.
     
    A study by Columbia Business School released on Monday predicts that the average consumer on the exchanges will lose more than $611 a year by failing to pick the most effective option for their needs, and that the government may lose $9 billion subsidizing poor choices.
     
    Other research, however, shows that buying down does not necessarily buy too little coverage. Liazon did a detailed analysis for one of its large clients of one full year of claims data and found that 75 percent of people were in the best plan for them.

    Safety nets
     
    If problems arise, there will be some safety nets on the public exchanges to help pay for emergency expenses on the silver tier, Claxton said. And some companies have employee assistance programs to help in these circumstances.
     
    The way high-deductible plans were designed to deal with this situation is with Health Savings Accounts, where conscientious consumers can stash away a bit of an emergency fund. Many employers directly contribute cash incentives to these accounts.
     
    People can also look at the maximum out-of-pocket expenses they would pay under their plans. “Even if you are buying a lower-end plan, you know what your total potential financial exposure is,” says Alwyn Cassil, director of public affairs at the Center for Studying Health System Change.
     
    In the worst-case scenario, there is always the reset button for next year.
     
    “Every year it's a do-over,” says Liazon's Cohen. “You're not making a decision forever.”

    You May Like

    Video As Refugees Perish, Greek Graveyards Fill

    Before burial at overflowing cemeteries, unidentified dead being swapped for DNA, in case some day relatives come to learn their fate

    Russian Opposition Leader Sues Putin for Conflict of Interest

    Alexei Navalny tells VOA in exclusive interview why transfer of $2 billion from country’s wealth fund to company with ties to President Putin’s son-in-law triggered lawsuit

    Clinton, Sanders Fight for African American Votes

    Some African American lawmakers lining up to support Clinton in face of perceived surge by Sanders in race for Democratic nomination in presidential campaign

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    As Refugees Perish, Greek Graveyards Filli
    X
    Hamada Elsaram
    February 11, 2016 8:01 PM
    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Russia's Catholics, Orthodox Hopeful on Historic Pope-Patriarch Meeting

    Russia's Catholic minority has welcomed an historic first meeting Friday in Cuba between the Pope and the Patriarch of Russia's dominant Orthodox Church. The Orthodox Church split with Rome in 1054 and analysts say politics, both church and state, have been driving the relationship in the centuries since. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video US Co-ed Selective Service Plan Stirs Controversy

    Young women may soon be required to register with the U.S. Selective Service System, the U.S. government agency charged with implementing a draft in a national emergency. Top Army and Marine Corps commanders told the Senate Armed Services Committee recently that women should register, and a bill has been introduced in Congress requiring eligible women to sign up for the military draft. The issue is stirring some controversy, as VOA’s Bernard Shusman reports from New York.
    Video

    Video Lessons Learned From Ebola Might Help Fight Zika

    Now that the Ebola epidemic has ended in West Africa, Zika has the world's focus. And, as Carol Pearson reports, health experts and governments are applying some of the lessons learned during the Ebola crisis in Africa to fight the Zika virus in Latin America and the Caribbean.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Illinois Voters Have Mixed Emotions on Obama’s Return to Springfield

    On the ninth anniversary of the launch of his quest for national office, President Barack Obama returned to Springfield, Illinois, to speak to the Illinois General Assembly, where he once served as state senator. His visit was met with mixed emotions by those with a front-row seat on his journey to the White House. VOA's Kane Farabaugh reports.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.
    Video

    Video Heated Immigration Debate Limits Britain’s Refugee Response

    Compared to many other European states, Britain has agreed to accept a relatively small number of Syrian refugees. Just over a thousand have arrived so far -- and some are being resettled in remote corners of the country. Henry Ridgwell reports on why Britain’s response has lagged behind its neighbors.
    Video

    Video Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growth

    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.