Today marks key enrollment deadline; health plan sticker shock ahead for some buyers
M. Spencer Green, Associated Press
CHICAGO — As a key enrollment deadline hits Monday, many people without health insurance have been sizing up policies on the new government health care marketplace and making what seems like a logical choice: They're picking the cheapest one.
Increasingly, experts in health insurance are becoming concerned that many of these first-time buyers will be in for a shock when they get medical care next year and discover they're on the hook for most of the initial cost.
The prospect of sticker shock after Jan. 1, when those who sign up for policies now can begin getting coverage, is seen as a looming problem for a new national system that has been plagued by trouble since the new marketplaces went online in the states in October.
For those without insurance — about 15 percent of the population — "the lesson is it's important to understand the total cost of ownership of a plan," said Matt Eyles, a vice president of Avalere Health, a market analysis firm. "You just don't want to look only at the premium."
Counselors who have been helping people choose policies say many are focused only on the upfront cost, not what the insurance companies agree to pay.
"I am so deeply clueless about all of this," acknowledged one new buyer, Adrienne Matzen, 29, an actor in Chicago who's mostly been without insurance since she turned 21. Though she needs regular care for asthma and a thyroid condition, she says she's looking for a low monthly premium because she makes less than $20,000 a year.
Hospitals are worried that those who rack up uncovered medical bills next year won't be able to pay them, perpetuating one of the problems the new health care system is supposed to solve.
The new federal and state health insurance exchanges offer policies ranked as bronze, silver, gold and platinum. The bronze options have the lowest monthly premiums but high deductibles — the amount the policyholder must pay before the insurer picks up any of the cost of medical care.
On average, a bronze plan's deductible is more than $4,300, according to an analysis of marketplace plans in 19 states by Avalere Health. A consumer who upgrades to a silver plan could reduce the deductible to about $2,500. A top-of-the-line platinum plan has the lowest average deductible: $167.
Comprehensive data on premiums isn't available, but in one example, a 30-year-old in Chicago would pay an average of $222 per month for a bronze plan, $279 for a silver or $338 for a platinum.
The complexities of insurance are eye-glazing even for those who have it. Only 14 percent of American adults with insurance understand deductibles, according to one recent study.
The danger of a wrong snap judgment is great for those under financial pressure — especially those with modest incomes who make too much to qualify for the government subsidies available under the new health care system. Subsidies aren't available for individuals making more than $45,960.
Most of the uninsured make less than that, but many still pick the cheapest plans.
"Price rules," said John Foley, a Legal Aid counselor in Palm Beach, Fla., who has been helping people enroll.
Some applicants see the catch.
"The real big surprise was how much out-of-pocket would be required for our family," said David Winebrenner, 46, a financial adviser in Lebanon, Ky., whose deductible topped $12,000 for a family of six for a silver plan he was considering. The monthly premium: $1,400.
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