Finding A Path Through The Health Insurance Market ‘Gobbledygook’

My ZIP code is a black hole for individual health insurance.

That’s what I recently discovered when I tried to find the coverage I want at an affordable price. What hubris I had.

My story started in 2009, when my position as a journalism professor at a small college was eliminated, and I lost my health benefits along with the job. In the ensuing months, as the clock ticked on my COBRA extension, I began to focus on finding a new health plan. I thought it would be a matter of dealing with mild sticker shock and doing comparative shopping. I was wrong.

As an experienced writer and researcher, I am used to making calls, asking questions and digging through hard-to-understand details. But it never occurred to me that the answers I uncovered about Tompkins County, N.Y. — a paradise of farmland, lakes and waterfalls close to the cultural attractions of Ithaca, home for me and Cornell University — would be so frustrating. It turns out it’s one of the state’s worst places to find good individual health coverage.

When I tell people about my dilemma, they get curious — even participatory. “Did you try a professional group?” they ask. “Did you try an online broker?” (Yes and yes.) Maybe they get caught up in my story because, unlike many people with tales of insurance woes, I’m in my fifties and healthy. My story doesn’t involve a medical condition that’s unsolvable or hard to talk about. Or maybe it’s just that my experience lights a path, however convoluted, through the insurance gobbledygook.

I started my quest with Aetna, my COBRA insurer. Under New York state law, I thought I had “conversion rights” — meaning I could convert my former employer’s group coverage, the basis for my COBRA plan, to individual coverage. Though the full monthly cost was already $565, and I worried I wouldn’t be able to afford any increases that kicked in when it became an individual plan, it was great insurance — providing excellent benefits and the ability to choose my own doctors. But it turned out my cost concerns were not even relevant. There is a caveat in the law: self-insured employers are subject to federal, not state, regulation. And because my former employer is self insured — meaning Aetna administers the plan but the college assumes all the financial risk — the conversion option did not exist.

After this idea evaporated, I explored possibilities on the website of The Freelancers Union, a professional association that offers its own health insurance in New York. Five plan choices popped up. Great, I thought. Then I clicked further to read about the plans’ residency requirements and up came a map. The right side of the state — covering 34 counties that share borders with New Jersey, Pennsylvania, Connecticut, Massachusetts, Vermont and Canada — was colored in blue. These counties are the lucky ones. Those on the left — 28 counties that border more of Pennsylvania and Canada, extending all the way to Lake Erie and Lake Ontario — were white, meaning no Freelancers Union health insurance. That’s where Tompkins County is.

This development was crushing. Somewhere along the way, the notion had lodged in my head that if I ever turned to freelance writing as my full-time job, I could get benefits through this type of organization. But — at least as far as I could tell — there are no such groups with health plans in my area.

I felt stupid. I also was getting curious, which happens whenever I feel stupid. The reporter in me wanted to know what the heck was going on. But the consumer in me needed a health plan. So I kept looking.

I tried other websites, starting with AARP. The site directs consumers to an AARP-branded Aetna plan. I entered my ZIP code and got the same response: the plan was “not available in your area.” Next, at a top-rated insurance broker site, my ZIP code brought up one result. The $561-a-month GHI policy covered annual physical and gynecologic exams, prescription drugs with a co-pay, hospitalization and outpatient surgery. But it did not cover, among other things, any other office visits; inpatient physical therapy; ER professional charges; diagnostic admissions; and diagnostic lab tests. To me, that seems like too much money to spend for what amounts to catastrophic coverage.

Curiosity was getting the better of me, so I did some random comparisons on the same website. Zip codes in the District of Columbia; Seattle; Fairbanks, Alaska; and New York City offered 80, 45, 56 and 16 insurance choices, respectively. I also tried random rural areas. Residents of Aladdin, Wyo., had 27 plan choices, starting at $380 a month. Residents of Amelia, Neb., had 87, starting at $133.05.

In search of clarity, I visited the New York state insurance website and discovered a whole new possibility: Healthy NY, a subsidized program for low-income people. Several different insurers offer the same basic menu of coverage through different regional HMOs, which charge different rates.

At first I ruled it out because I wouldn’t be able to choose my own doctors, which has always been very important to me. But I was starting to feel desperate. And I qualified for the plan because it just so happens that in January, I made less than $2,269. I never imagined I would be glad to have a dry spell with my freelancing.

I was not surprised to discover that, although New Yorkers in many other parts of the state can choose a Healthy NY insurer from several options, I only had one: Excellus BlueCross BlueShield. I was just glad to learn that I could get insurance. A phone call led to an additional choice, through the same insurer, that would let me see my own doctors. But it would have cost around $1,400 a month, which is the same as my mortgage. There was also a plan for sole proprietors, but I didn’t qualify.

At this point I went into full reporter mode. I called Troy Oechsner, New York state deputy superintendent for health, and asked him about my scarcity of coverage options and the high costs associated with them. He told me that some other rural areas in the state are in a similar fix, and he said, “For an insurer to get into the area of Tompkins County, where Excellus has such a large hold on the commercial market, is really difficult.”

Ah. That rings a bell. I remembered reading a very similar conclusion in a 2009 United Hospital Fund report: “Entering Central New York is entering the Excellus zone” — a 15-county region where “the region’s nonprofit BCBS plans vigorously defend their turf.” Who do they defend it against? Mostly for-profit insurers, which have a much stronger foothold in downstate areas, including greater New York City. Nonprofits have historically claimed upstate markets (which include Central New York). In my region, Excellus in particular dominates, with a strong record of well-established health-provider relationships.

Not only am I in the Excellus zone, said Oechsner, but I’ve stumbled into “the plight of the individual market in New York.” It’s a decades-long saga in which the state “traded the problem of a group of people who can’t get insurance at any price for another problem, which is that our individual rates are out-of-control expensive,” he said. In other words, the state gave up some of its power to regulate rate increases in exchange for guarantees of access to quality coverage for everyone — although as recently enacted legislation is phased in, the state is regaining more control over the increases.

I still didn’t get why the Freelancers Union insurance isn’t available to me. So I called Chief Operating Officer Ann Boger, who explained that the group’s plan in New York is linked to the service area of Empire BlueCross BlueShield. I knew from my other research that Empire can’t operate in Excellus territory without giving up the BlueCross BlueShield brand. Boger also said that offering insurance in rural areas is a challenge. “The nature of insurance is that it works best organized around large numbers,” she added.

What about those rural areas I randomly sampled on the broker website? My answer came from Peter Newell, director of the United Hospital Fund’s Health Insurance Project. It’s simple: I didn’t compare the coverage. He talked of plans that have limited benefits, ratings for gender and age that push costs much higher than advertised, and exclusions for people with preexisting conditions. Broker websites, for all their ease of use, don’t instantly compare apples to apples. “If you compare my neighborhood to someone else’s neighborhood, you’ve got to think about those things,” said Newell.

Newell told me the federal health care reform should help me eventually — particularly with the establishment of health insurance exchanges that should yield more choices.

But for now, time has run out. I have signed up for the high deductible option in Healthy NY, with a drug benefit, for $296.48 a month. The deductible is $1,200 a year. I’m approaching this choice as a stop-gap measure, although, as I told Oechsner, I now have a strong incentive for limiting my income.

His response: “There’s no way to sugar coat it: You’re right. If you make too much money, individual health insurance in New York gets very expensive.”

I also have one foot out the door as I weigh my professional prospects. If I move, especially if I’m making a living as a freelancer, my first criterion in choosing a location will be something I’ve never before considered: the availability of good health insurance.

This article originally appeared at Kaiser Health News.

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13 replies »

  1. Merle/Peter: this has nothing to do with BCBS being evil or being a monopoly. This is simply the result of a broken insurance market driven by poor state legislation.

    If the only people who seek individual insurance are very sick people (and their applications cannot be denied), what do you expect any insurance company to do? The premiums simply reflect the cost of care for a very sick pool of patients. If you want affordable insurance, you only have two choices: 1. medical underwriting (to keep sick patients out of the pool) or 2. mandatory purchasing (to keep healthy patients in the pool).

  2. Why didn’t you pick up the phone and call an insurance broker who could have given you all these answers in 30 seconds?

    “A glaring example of why insurance companies — both for-profit and non- profit — shouldn’t be exempt from antitrust law.”

    Merle, please explain how an anti trust exemption that only allows the sharing of claim data and some other related data has anything to do with this sitution? In fact the sharing of that data would make it easier for other carriers that don’t have a block of business to try and write in NY, not harder. It doesn’t appear you actually know what the exemption is.

    The problem here is NY. It is very common for insurance companies to be licensed in 49 states, NY being the one no one wants to do business in. Between their mandates, issue requirements and state pool that drove up rates for the entire country it is possibly the worst state in the country to be an insurance company, obviously carriers are going to shy away from it.

    Not a single person on here wants to address the real problem with NY then you wonder why nothing ever gets fixed.

    ” For example if you take a cholesterol lowering medication as a preventive, you will likely be considered uninsurable by the insurance company. Even if you have never had any symptoms or a heart attack, you are still uninsurable. ”

    Old One where do you get your info, this is not true at all. Problem isn’t the insurance companies it is the states that say the spread between a sick person and a healthy person cna only be X. Unless you want to run off every healthy person you have to exclude the sickest, allow broader range and more people become insurable.

  3. I’m running for President in the 2012 elections as an Independent candidate.

    Here are my health care policies:

    He says Obama Care does not go far enough, and proposes a completely new healthcare plan he calls “Americare,” which will provide government healthcare for everyone from cradle to grave.

    “Americare will pay for the needs of all United States citizens and allow healthcare providers to be compensated according to their skill set. It will replace Medicare, Medicaid, and all private insurance. I believe that all private insurance companies are criminal organizations, because they make profits by delaying and denying care which could in many instances cause unnecessary deaths and suffering to people who rely on private insurance,” explained Abramson.

    Abramson wants the liquidation of all private insurance companies, moving their administrative workers into Americare jobs. He wants to offer forgiveness of all medical indebtedness for anyone with debts resulting from the previous healthcare system. He said the cost of Americare will be paid from the savings obtained through military budget cuts.

  4. Unfortunately the situation is much worse than what the story describes. Your definition of “healthy” might not coincide with the insurance company’s definition of healthy. For example if you take a cholesterol lowering medication as a preventive, you will likely be considered uninsurable by the insurance company. Even if you have never had any symptoms or a heart attack, you are still uninsurable. Broadly speaking about 30% of adults in the 55 to 65 demographic are “uninsurable” due to one reason or the other.

    Where the article misleads is the implication that if you see insurance coverage listed you assume that since you are “healthy” you will qualify for it. It is only when you apply that you find out that you do not qualify.

    But you say “I have been continuously insured for X years” without any lapses in coverage. It does NOT make any difference to the insurance company.

    There are many folks that find themselves in this situation. They end up in state “high risk pools” where you can not be turned down for coverage. It is common for these pools to cost over $1,200/month per person.

    Bottom line is that until you are approved by an insurance company, you do NOT know what coverage is available. . .

    Good luck!

  5. What a great story and revelation. Yes, BCBS raises it’s ugly market dominated head again. But hey, they’re non-profit, the good guys – right?

    OK Nate, give us your take on this.

  6. Lisa, thanks for sharin this story. I never though that your location can affect your insurance options. Hoever, I hope the beautiful place you live it it eliminate or decrease the need for medical help;)

  7. Welcome to what the AMA calls the best health care system in the world!! Now help in lobbying them and congress to release data and publish the cost per patient per year for all providers of tax payer (our money)supported health care. Listed by provider number and separated by provider type and for instance medical specialty it will begin to show where the money is going and perhaps why we pay twice as much per person for care that is statistically worse than many other developed countries. At least it will allow the media and press to analyze the data as the Wall Street Journal has sought to do for some time now and help all of us to become better consumers which the Republicans are insisting will control the whole issue of rising medical costs. It might also help to correct the problem that Medicare now has of taking months to find out some providers have cheated them out of millions of dollars. It hopefully will point out who the cost effective providers are although to this end the data must be combined with some effort to measure quality. However as a start the raw data can be used and outliers will have an incentive to provide their own data justifying their patterns of practice. Those who are seeking Cadillac service will be thankful to have information directing them to where this is available. Those who do not want their weekly MRI or annual heart cath or colonoscopy for no apparent disease will be able to chose appropriate providers before there are free standing imaging centers and doctor profit sharing hospitals on every corner which those who advocate total free enterprise advocate. No controls will only work with total transparency and accountability based on evidence based medicine. Perhaps then we really will have the best health care system in the world.
    Oh part of this transparency must be how much of your premium is going to pay the multi-million dollar salaries of the managers and agents of your insurance company plus the profit to there shareholders. What is the “Medical Loss Ratio” their term for what they actually spend to provide health care!!

  8. The problem with all unsubsidized NY individual insurance is that it is guaranteed issue, but not mandatory. Hence the $1400/mo price tag. In Boston, unsubsidized individual insurance for a 50-year old start at $350/mo for bronze policies. You cannot have affordable guaranteed issue without mandatory coverage.

  9. A glaring example of why insurance companies — both for-profit and non- profit — shouldn’t be exempt from antitrust law.

    The solution is simple. Stimulate competition and watch what happens. Coverage options will increase and premiums will come down!

  10. This is a very good statement and with lawsuits and so forth patients an doctors and put in this big mess of trying to figure out both the algorithms of qualifications and of course payment systems and the smarter we get with technology the more confusing it gets with trying to shove out little bodies into a data base and query to see if we meet all the criteria that changes all the time too.

    “Every misspent dollar in the health care system is part of somebody’s paycheck.”

    On the payment side with MDs it’s getting worse as well with their compensation and thus when the patient and doctor are just trying to address health issues and get care, the maize of algorithmic formulas enters the picture before anything else gets done and sometimes as noted with this recent ERISA class action suit, interpreting and determining what is covered from the onset is still not good enough with patients and doctors getting bills down the road for items initially paid and covered, it’s all in those algorithms.


  11. Interesting (sadly so). Just ONE story. Multiply this by millions and it’s no surprise that we pay 2x per capita for health care relative to comparable industrial nations, with uneven outcomes for our trouble.

    It’s crazy. All of it.

    But, then,

    “Every misspent dollar in the health care system is part of somebody’s paycheck.”

    – Brent James, MD, M.Stat

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