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 Obama Remembers Fallen Troops for Memorial Day

    President urges Americans this holiday weekend to 'take a moment and offer a silent word of prayer or public word of thanks' to country's veterans

    Upsurge of Migratory Traffic Across Sahara From West to North Africa

    A report by the International Organization for Migration finds more than 60,000 migrants have transited through the Agadez region of Niger between February and April

    UN Blocks Access to Journalist Advocacy Group

    United Nations has rejected bid from nonprofit journalist advocacy group that wanted 'consultative status,' ranking that would have given them greater access to UN meetings

    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.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora