Will all the White House messages, the stream of breathless Twitter updates on the number of hits and enrollments, and the press hype surrounding opening day send the uninsured public into panic mode? Will they prompt buyers to consider only the premium and click to enroll ASAP? And why not? For weeks the administration, state exchange officials and supporters of the Affordable Care Act have been telling the public how cheap premiums will be — much cheaper than expected.
A Pennsylvania woman told me she was chomping at the bit to enroll because she was eager to dump her policy from Aetna for a cheaper model from Blue Cross. Never mind that she had no idea whether the coverage was better, the same, or worse.
A Nebraska woman heard there was a worksheet to fill out and it had to be completed by October 1. It was first-come-first-served, an agent had told her.
If cheap premiums were the only thing shoppers had to consider, this sense of urgency might be fine. But it’s not. Here’s the problem.
Selecting a health insurance policy is fraught with potential missteps and misunderstandings. As the Nebraska woman told me, “You’re walking into a chasm of uncertainty. It’s like shopping for a used car. You don’t know if you’re getting a lemon,” a lemon you’re stuck with until the next open enrollment.
For consumers, the key advice right now is: don’t rush into anything. Tuesday, October 1st marked the first day of a six-month open enrollment period, not the last. Coverage doesn’t even begin until January 1, 2014, so there’s no need to buy the first policy you see. If you do want coverage on January 1, the deadline for enrolling is Dec 15.
It’s important to consider not only the premium but also the elements that make up that premium. In other words, what it is that insurance companies look at when deciding how much to charge shoppers for a particular policy. They mix and match different deductibles, coinsurance and copayments to determine a price that will attract buyers.
When it comes to insurance the more you pay, the richer the benefits. If you choose a gold plan (one of the four types of policies sold on the exchanges), which covers 80 percent of your medical costs, the premium will generally be higher than it would be for a bronze plan that which covers only 60 percent.
Sellers of bronze plans will offer cheaper premiums, but they typically will make consumers pay higher amounts of cost-sharing. That is, deductibles, coinsurance and copayments might be higher than they would be for a gold policy. So consumers need to consider the trade-offs. Do you want to pay more up front and have most of your expenses covered? Or do you want to pay less up front and pay when you get sick?
Of course, if you don’t think you’ll need any care for the year, the cheaper policy will be the right choice. If you do get sick, then deductibles, cost-sharing and co-pays enter the calculation. Increasingly, insurers are setting high the percentage of a bill that you will have to pay — rather than offering the more familiar and lower co-pays, such as $20 for an office visit. People who select bronze plans will pay on average 40% of their medical bills, while gold plan policyholders will pick up an average of 20%. Out-of-pocket costs will be limited in 2015 plans.
Making trade-offs is hard any time, but it’s especially tough when it comes to health care. It involves predicting illnesses you might get during the year, and no one has a crystal ball. While people with chronic conditions can reasonably predict their medical expenses, unexpected illnesses can befall anyone. A policy that meets your needs today may become a lemon five months from now.
Trudy Lieberman, a journalist for more than 40 years, had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She contributes to the Columbia Journalism Review and is a William Ziff Fellow at the Center for Advancing Health. She contributes regularly to the Prepared Patient Blog, where this post originally appeared.