Choosing the Right Health Plan Help for Consumers In the New Marketplaces

The new health insurance Marketplaces set up under the Federal health reform law will make getting insurance possible for many consumers who could not get it before because of cost or because insurers would not cover them on account of pre-existing health conditions.

The law says that these Marketplaces will also assist "consumers in making easy health insurance choices." That is a task that CHECKBOOK, as a consumer organization, has followed carefully and has tried to help the Federal government and states to do well. We believe the Federal government and many states have so far come up short on this task although some continue to work on improvements.

We come at this with a unique perspective. For 34 years, we have produced CHECKBOOK's Guide to Health Plans in book form, and for the past dozen years in online form, comparing and rating the 200-plus health plans available to the eight million employees and retirees covered by the Federal Employees Health Benefits Program. This Guide, which like all CHECKBOOK publications and websites carries no advertising, was for many years supported by ordinary consumers who valued it enough that they paid for access (a good source of discipline for creating a usable tool) and over the past dozen years has been subscribed to by various Federal agencies (HHS, Labor, Federal Reserve, IRS, and many others) to help their employees make good health plan choices. It is a model that stands out in the Consumers Union/Consumer Reports review of the best-known comparison tools: "Choice Architecture: Design Decisions that Affect Consumers' Health Plan Choices."

We have also worked under contract with some states to help them create good plan comparison tools.

To help you and friends or family members, wherever they may live, who may be buying insurance in new Federally required and similar private marketplaces either now or as more and more employers may begin to send employees and retirees to such marketplaces, we have put together a few tips, below. These are general tips and may be more or less applicable in different states, since different states will have different features.

To Keep Costs Down

  • Check what you'll have to pay in premiums—but don't go by premium alone because the plans with the lowest premiums will often cost you much more than other plans when you take into account what you will have to pay out-of-pocket for services you receive--because of differences in deductibles, copayments, coinsurance, and gaps in out-of-pocket limits.
  • Compare what you might have to pay out-of-pocket. See if the marketplace website gives you a single dollar-amount average total cost for people like you—same age, family size, etc. Because comparing out-of-pocket costs can be very difficult and confusing, some marketplace websites (such as Massachusetts' and Colorado's) will be giving such total-cost estimates and others may have this capability soon (unfortunately, the Federal government's website, which will be used by many states, will not initially have this feature). Done properly, such a total cost figure will take into account the average amount people like you will have to pay based on deductibles, copayments, coinsurance, and other cost-sharing provisions of each plan--an average amount considering the chances of good years and unpredictable bad years in which you might have expensive health care needs.
  • Don't choose based on deductible alone. Plans with low deductibles often prove to be very expensive—especially if they have high coinsurance or don't have a low limit on the most you could ever have to pay if you have an unexpected disease of accident.
  • Try to find an estimate of your risk—what your total cost would be in a year if you have very high health-care usage. Some plans are good on average but leave you with very high costs in a bad year.

To Have a Good Choice of Doctors and Other Providers

  • See if the marketplace lets you enter the names of doctors you know you would like to be able to see and then automatically tells you which plans have those doctors. If not, you will have to go to each plan's website to look at the plan's doctor directory (the Federal government's website will not initially have such an all-plan provider directory).
  • If there are doctors you care a lot about and a plan lists them as available, follow up with a call to these doctors' offices to be sure the doctors intend to continue accepting insurance coverage from patients in the plan.
  • If you don't have doctors you care about, this would be a good time to try to identify a preferred doctor or doctors—at least a good primary care doctor and maybe specialists of types you know you will want-and check whether any such doctor participates in plans you might consider.

To Get Good Care and Customer Service in a Plan

  • Check what surveyed members have said about the plan. Many marketplaces will post the results of official, standardized surveys where the members rate, for example, the availability of good doctors when they need them, the helpfulness of plan websites and customer service staff, speed and fairness of claims handling, etc.
  • Check whether the plan provides services you might want to help you stay healthy or deal with medical problems. Some plans offer free weight-loss and fitness programs, stop-smoking programs, nurses to help sick patients manage care and coordinate care from multiple providers, etc. Look for evidence that a plan's programs really have a track record of success.

Words of Caution

  • Be wary if a marketplace tries to give you a total estimate of out-of-pocket cost based on how many doctor visits, prescriptions, etc. you say you expect to have. That type of total cost estimate ignores possible very high expenses for accidents, diseases, etc. that you can't predict.
  • The best plan for you or your family might not be the same plan as is best for other people with different ages, family makeup, health conditions, or other characteristics.
  • Don't assume that the bronze, silver, gold, or platinum labels on plans tell you which plan will be cheaper for you. The lowest-cost silver plan might be $2,000 less expensive than the lowest-cost bronze plan for one family with certain age and health-care needs, and the opposite might be true for another family when considering premium and what you have to pay out-of-pocket.
  • Be aware that you might have to pay back part or all of the tax credit the marketplace (exchange) tells you you'll get to help pay your premium. The tax credit is based on your family income in a prior year and you might have to pay some or all back on a future tax return if your income turns out to be higher than what was used to figure the credit. If you are worried about that, you can choose to take a smaller credit now and get any more that you are entitled to after your actual income is final.
  • Even when looking at specific benefits, look at the details and exceptions. For example, when you see a figure for the maximum amount you will have to pay out-of-pocket in a year, check whether that limit applies to drugs.
  • Don't narrow the list of plans you will consider without checking what you will be giving up. Some Marketplace websites might ask you up front if you want to rule out joining an HMO or joining a plan that does not have your doctor. If you do such narrowing up front, you might never see plans that would cost you thousands of dollars less or that have great doctors and customer service.
  • Don't rely too much on examples plans give of the costs for specific procedures or conditions. All plans are required to tell consumers how much the out-of-pocket costs will be for a normal childbirth and for a typical person with controlled diabetes. Check that information. But be aware that, for example, a plan might require members to pay a low portion of costs for childbirth but a relatively high portion for most other types of service.

For Additional Assistance

  • Visit www.healthcare.gov or call 1-800-318-2596 for more information; both the website and call center are operated by the U.S. Centers for Medicare and Medicaid services and are designed to provide information and put consumers in touch with resources related to the Marketplaces/Exchanges. This is a place where you can find how to connect with the official public Marketplaces serving each state.
  • For much more information on Health Insurance Exchanges, how they can be set up to be most useful to consumers, and what CHECKBOOK has been doing to help reach that goal, go to www.checkbook.org/exchange.
  • Nonprofit Consumers' CHECKBOOK has launched a model website for the state of Illinois. The website, www.healthplanratings.org, developed by CHECKBOOK as a free public service, with the potential to be replicated or imitated for other states to more fully achieve the potential of Obamacare.