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

Will Cuba Follow the Southeast Asia Model?

Decision to restore ties between US and Cuba has some debating whether it will lead to enhancement or regression of democracy for Communist island nation More

Kenyan Designer Finds Her Niche in Fashion Industry

‘Made in China’ fabrics underlie her success More

Report: CIA, Israel's Mossad Killed Senior Hezbollah Commander

The Washington Post story says Imad Mughniyah was killed instantly by a bomb "triggered remotely" from Tel Aviv by Mossad agents More

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.
Jefferson's Library Continues to Impress, 200 Years Lateri
X
Deborah Block
January 31, 2015 12:12 AM
Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Jefferson's Library Continues to Impress, 200 Years Later

Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid