New York Times reporter Abby Goodnough’s piece last week about the health insurance exchange in Massachusetts is instructive—especially since other states are trying to set up their own versions of these shopping bazaars where the uninsured can buy coverage if the health reform law eventually takes effect. For the last three years we have been suggesting there’s an untold story in the Bay State about how the law is working, so we were glad to see Goodnough’s reporting and offer a tip of the hat.
Goodnough gets into the subject with a success story: the tale of Peter Kim, who lost his employer-sponsored health insurance in 2005 when he opted for a career as an independent consultant. He found that shopping for insurance in the open market was a complicated affair, and that most plans were too expensive. He eventually chose coverage for catastrophic illness.
Then he discovered his state’s health insurance exchange, called the Connector. After just an hour of research, he found a plan with a monthly premium of only $1,086, a better deal than the coverage he previously had. And ideally, that’s how exchanges should work, Goodnough said.
The trouble, she reports, is that so far the Connector has not drawn enough full-paying customers like Peter Kim.
As Goodnough notes, the exchanges have drawn little journalistic scrutiny so far, despite their key place in health reform. (And, we note, despite the fact that they grew out of initiatives backed by former Massachusetts governor and current presidential candidate Mitt Romney.)
If the Supreme Court upholds President Obama’s federal health care law in a decision expected this month, proponents say that exchanges will be a crucial tool for extending insurance to most Americans. Debate over the law has centered on the individual mandate, the lightning-rod provision that requires most Americans to have health insurance by 2014.
But once the court decides whether the law is constitutional, the focus could shift to exchanges.
Goodnough makes three major points that journalists should keep in mind and be prepared to investigate should they do similar stories.
1. For the exchanges to work properly, there needs to be lots of customers like Kim who pay the full price for their coverage, in order to help offset the cost of providing subsidies to those who can’t afford the premiums. The Massachusetts Connector has attracted only half the available pool of full-paying customers in the individual market. Instead, 82 percent of Massachusetts residents in the exchange qualify for state or federal subsidies, and pay only a modest premium or none at all. That, Goodnough notes, “is precisely what many opponents of exchanges fear, that instead of a free marketplace they will become something resembling an extensive public welfare program.”
Small businesses, which could pay the full premiums the exchange needs, have been slow to sign up their workers for insurance through the Connector, largely because the costs of coverage are too high. About 1,700 small businesses insure only 4,230 people so far—what the Times called “only a minute fraction of that market.”
2. Customers who do pay full price in the exchange are buying the low-cost bronze plans that offer less coverage in return for a lower price. In fact, 52 percent are choosing these policies—up from 42 percent in 2009, when I went to Massachusetts to check on how well the state’s law was working. The problem: these plans have high deductibles, the Times reported—as much as $4,000 per family, and maximum out-of-pocket costs “meaning that people who get sick often end up paying a lot.”
“We are growing increasingly concerned about high-deductible plans that seem like a short-term solution to folks,” explained Amy Whitcomb Slemmer, the director of the advocacy group, Health Care For All, a big supporter of the Massachusetts law. “We spend a tremendous amount of time helping people understand what risk they’re taking,” Whitcomb Slemmer said. But his kind of coverage is fast becoming part of the brave new world of health insurance, and will continue whether or not the Supreme Court upholds the Affordable Care Act.
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?????
This guy is paying $13,000 per year for health insurance for his family and that is a good deal?
Where are the details? What were the premiums and the deductibles in his old plan versus the premiums and deductibles in the new plan?
I pay $389 per month for an Anthem family plan with $10 million in coverage and a $7500 deductible ($2500 per person). I get a free annual physical for everybody in the family but pay out of pocket for everything else until the deductibles are met (and they never have been in the six years I've had this plan). Of course, my premiums have skyrocketed since the "Affordable Care Act" was crammed down the voter's throats - it started out at less than $200 a month for $7 million in coverage. I can go anywhere I want for service and i can buy a prescription anywhere I want. The absolute MOST I could ever pay in a year is $12,168 and this would require everybody in my family requiring more than $2500 in treatment. My plan pays everything after that - drugs, chemo, transportation, etc.
Mr. Kim pays$1000 more than that just in premiums, and I suspect his choice of providers is limited. He probably also has copays and/or deductibles.
How is he getting a good deal here?
#1 Posted by padikiller, CJR on Mon 18 Jun 2012 at 08:15 PM
"..crammed down the voter's throats.."
Unfortunately, usage of this phrase has become a key fieldmark of people who are staunch ideologues to the point where any cited 'facts' are at best highly untrustworthy and at worst outright and quite extraordinary fabrications. I agree with padikiller that the details are important; unfortunately, given the history of prevarication shown by the modern 'right-wing', I will not even provisionally accept his assertions (barring a written, long-form, certified and notarized document offered as proof, of course). This is the great problem - how can we communicate when each side believes the other side is lying? Can we even trust 'facts' any more? What a shame that we don't have some sort of (call it 'news media' for lack of a better term) which would work to inform the citizenry rather than simply confirm their prejudices.
#2 Posted by JohnR, CJR on Tue 19 Jun 2012 at 12:06 PM
@JohnR
I can see why you wouldn't trust my claims, but I don't see your beef with calling it like is regarding Obamacare.
It most certainly was crammed down the throats of the voters in a sickening and corrupt manner.
Poll after poll, then and now, shows that Americans overwhelmingly detest Obamacare.
As for the cost of insurance ---
You can GET A FREE INSTANT QUOTE FROM ANTHEM.
I just checked, and found that if I raise my deductible to $10,000, I can get the premium knocked down to $176 per month.
Thus my maximum out-of-pocket expense (including premiums) wouldn't change much ($12,112) but if everybody stays healthy, then my annual cost will drop to $2,112 per year.
Typically, I pay about $1,000 a year in doctor's visits and prescriptions, so this new plan would save me almost $3000 a year.
As a bonus, I see that Anthem has also dropped its lifetime caps entirely - benefits are now unlimited.
So HOW on earth is the guy who pays $13,000 a year just in premiums getting any kind of a deal?
#3 Posted by padikiller, CJR on Tue 19 Jun 2012 at 01:13 PM
Seems like forcing people to purchase private insurance is better than letting them get health care on the government's dime. Obviously, if you don't have health insurance or you're too poor and/or too old (ie. the ones likely not to be able to afford private insurance), then you currently use the government health care system. We all pay for these systems through our taxes.
The president was voted into office because he ran on the topic of health care. It was never a surprise that this was going to occur.
Don't be naive on your health insurance. You never controlled what doctor's you could see. This has always been controlled by the insurance companies (at least every plan I have ever had).
Half of the laws written into the affordable care act should never have needed to be written in the first place. But bad business practices by insurance companies make it necessary. Of course you should be able to get health insurance with pre-existing conditions. Of course, you shouldn't be kicked off a plan at some arbitrary dollar amount. What is the point of insurance if not to be covered when something bad happens?
We have always been subsidizing the poor and the elderly. Forcing them to use private insurance and getting off the government dime is a good thing.
#4 Posted by Mike, CJR on Fri 6 Jul 2012 at 08:16 AM