Carol feared a runaround and she got one. But Aetna’s hefty premium increase is not simply a consumer’s complaint. It is a big dollars-and-cents issue for thousands of families like hers that have seen their premiums climb into the stratosphere over the past decade—a problem unlikely to quickly disappear under Obamacare. A look at her current predicament may help illuminate the kinds of choices she and many others face in coming months.
Carol had chosen her HMO 30 policy because it appeared to be the cheaper option at the time. It covers her and two adult children in their early 20s, who stayed on her policy after college, thanks to an Obamacare provision that lets young adults remain on their parents’ plan until age 26. (Her husband, 59, a former railroad worker, is disabled because of a job-related injury. He gets a pension from the Railroad Retirement Board and health coverage from Medicare.) Carol earns about $20,000 a year as a freelance proofreader. Before premiums got so expensive, she had coverage from what is called a preferred provider organization, a PPO. “I loved it,” she said.
Who wouldn’t? She could go to any doctor, and the out-of pocket costs and the premiums were reasonable. The PPO got too expensive, so she chose a new plan called the HMO 15, a managed-care policy with restrictions on which healthcare providers she could use, but with reasonable copays. Premium increases continued to pile up, however, and she switched again—to the HMO 30 plan, with slightly lower premiums but much higher copays and more cost-sharing. She didn’t shop for insurance from other companies. “It was so hard to compare plans,” she said. “I just gave up.”
Comparing plans is very hard—even for people like me who are supposed to understand them. Comparing even a few of the benefits—all the while not knowing which illnesses you or your family member may face in the next year—requires a person to calculate risks and make tradeoffs. That’s a tough exercise that requires an understanding of how insurers price their products, and what the fine print means—like the difference between coinsurance and copayments and how deductibles vary depending on where you receive care. Insurance companies tend to mix and match between various costs for various kinds of services, a little more for this, a little less for that, making apples-to-apples comparisons difficult.
For example, Carol’s HMO 15 plan required a $15 copay—a set amount for a service—for a CT scan or an MRI done as an outpatient, a $15 copay for outpatient X-rays, and blood work, and a $15 copay for urgent care. With her HMO 30, the premiums were slightly cheaper but the copayments shot way up—$250 for CT scans and MRIs, $50 for blood work and X-rays, and $200 for a visit to an urgent-care center. And while her old plan required a $15 copayment for the facility fee at an outpatient surgical-care center, the HMO 30 requires a $550 copay, an amount Carol found challenging. “I was supposed to get an endoscopy ,” she told me. “I cancelled it.”
She did make an appointment for a gallbladder-function scan because the copayment was only $50. “The average person does not understand why certain tests require a huge copay, and others don’t,” she said. Drug coverage was different, too. In short, health insurers are pushing consumers toward choices that may be best for the insurer’s bottom line.
Carol’s doubts about her Aetna coverage multiplied in March, when the company sent the letter about the premium increase. In essence, the company was telling her she could keep her HMO 30 plan, but that it might not have a lot of new benefits that policies sold after October 1 will have—benefits required by the Affordable Care Act—that she may not need. And that these new benefits come with a price that she may not want to pay.
Between the lines, it seems, Aetna was also revealing a strategy: Try to keep as many healthy policyholders on the books as long as possible. The message: Stay with us instead of venturing into the unknown in the exchanges. Carol and her children are reasonably healthy, and in terms of insurance company profits, the more healthy people on board the better. Still, she was flummoxed by the choice. “Do you want the devil you know or the devil you don’t know?” as she put it.