One of the numerous "proof's in the pudding" tests for the Affordable Care Act (ACA) will be if the plans offered on state and federal online exchanges are competitive with similar plans on the private market.
To test this idea on a practical basis – I'm looking for a plan for my family of four – I sampled some policy quotes on ehealthinsurance.com, a privately run site I've used many times in the past. It's a practical model for how online exchanges can work. It's fast, efficient and easy to contact a live person. The site claims to offer 13,000 plans from more than 150 carriers.
The good news for my family and many others is that previous "underwriting" for pre-existing medical conditions will no longer be allowed in ACA-compliant private policies issued after Jan. 1. This is a big plus for us, because my family has lots of serious pre-existing conditions, including cancer.
That doesn't mean that private insurers can't boost premiums to reflect age – both my wife and I will be over 50 next year – or the local cost of medical care, which is pretty high in Northeastern Illinois, where we live. So getting any policy, whether it's from the public or private exchanges, will not be a screaming bargain for us. We won't qualify for subsidies offered to many shoppers through our state exchange or the dysfunctional HealthCare.gov site. Note: The subsidies will make policies affordable for those with incomes well under $100,000 annually.
I'm just looking to save on the out-of-pocket expense I currently face for care not covered under my existing private policy, like doctor's visits, clinical tests and prescription drugs. All of these cost items are covered under the "basic" benefits of the ACA policies.
WHAT I FOUND ON THE PRIVATE EXCHANGE
The ehealthinsurance site quickly pulled up several policy options for me.
The least expensive basic plan was the "Blue Cross Bronze PPO 006," which seemed to be similar to a policy I found on HealthCare.gov. Reflecting the ACA guidelines for no maximum lifetime benefit, the monthly premium was $652.39 a month, or $7,828.68 a year.
At present, I have a catastrophic health plan that costs $7,128 a year ($594 monthly) for premiums, but doesn’t cover major medical bills before my $6,350 deductible. Is the private plan worth $700 more a year?
When I called ehealthinsurance, a licensed representative told me insurers raised their premiums for 2014 policies to cover the fact that they couldn't turn away applicants next year with serious pre-existing conditions nor impose lifetime limits on reimbursement.
All of the plans on HealthCare.gov cover basic services such as immunization, doctor's visits, maternity and prescription drugs. My out-of-pocket limit is $6,350 on the individual private plan; it's the same for the HealthCare.gov policies ($12,700 for a family policy).
All of the private plans I considered have the same restriction: They won't cover anything until I meet the deductible, so the premiums are a good pricing point to compare. When I priced policies on the Obamacare marketplace, I found a wide range of prices – from $435/month for a basic, "bronze-level" plan to $1,295 soup-to-nuts "platinum" plan. The bronze-level plan on the public exchange was fairly similar to the catastrophic plan I have now.
On ehealthinsurance, a "silver" HMO plan from Blue Cross/Blue Shield – one step up from bronze – was more than $900 a month.
While I know my family can't afford the plans in the precious metals range, I want to avoid getting nailed by surprise, out-of-pocket expenses. I'd also like my doctor to be in a preferred provider network. I'm not interested in a health maintenance organization. Will a HealthCare.gov plan meet my requirements? I can't answer that yet because the site is still not working right.
Based on what I have been able to determine so far, we should come out ahead on out-of-pocket expenses on the HealthCare.gov plan since in our worst-case year we spent some $15,000. Without seeing actual policy documents, my estimate is that our family could save from $1,000 to $2,000 annually with the cheapest Obamacare policy.
I've applied to HealthCare.gov (by phone), which should let me know if my application has been processed in two weeks. That's turtle time by today's standards, but given the government's technical ineptness in designing the website, it's the best I can do for now. At least until I get the answers I need, I'm sticking with the private coverage I already had (I haven't been told my plan is being cancelled, unlike millions of others). I decided that the options I saw on ehealthinsurance.com were too expensive, though others may certainly find plans to their liking.
Although the Obama administration has promised a massive technical fix will be in place by Nov. 30, it's difficult to say how the patch job will overcome the lost momentum from the botched roll-out. Over the first month of the ACA exchanges, only about 106,000 people have signed up for insurance plans, and only about a quarter of those came through the federal marketplace.
At this point, unless a surge of new applications coarse through a workable system, it seems highly unlikely that the government will hit its goal of 800,000 new enrollees by the end of this month. Maybe they should call the banks that floated the successful Twitter initial public offering. Better yet, they should hire the billionaire tweeters behind the service. They might be able to get something off the ground faster than the government.
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