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.
Indeed, Aetna was asking her to make a choice without all the facts. The company’s letter omitted a crucial factor: the possibility of an Obamacare subsidy, which would make coverage more affordable. She could only get that subsidy if she buys in the exchange. And, as it turns out, Carol is eligible for a subsidy, because her household income—her income plus her husband’s from his pension—is below $62,040, this year’s eligibility cutoff for a household like hers.
Until she begins shopping in the Pennsylvania exchange and chooses a policy, she won’t know the exact amount of the subsidy she would get, or her remaining share of the premium. The exchange will automatically calculate the amount, based on her income and the policy she selects. But a family whose income is between 300 and 400 percent of the federal poverty level, where Carol and her husband roughly fall, should get a subsidy that covers between 35 and 44 percent of the premium.
That kind of help might allow Carol to buy a better policy than Aetna’s HMO 30, with more benefits and less cost-sharing. That might make it easier to have tests like the endoscopy she decided to forego. But making the calculation is not easy.
One thing health advocates fear: The choices in the exchanges might be too numerous. In Colorado alone, 17 health insurers have filed proposed rates for 813 different plans for individuals and small groups. Research has told us that when people have too many choices, they make no choice at all. Just choosing between two plans, as Carol did recently among Aetna products, was hard enough. “The plans had all kinds of variables and, as you know, with kids, you never know what will come up medically,” she said. “So it’s hard to predict what I would need. I did the best I could with the material Aetna sent me.”
Now she must choose again. CJR will follow Carol this fall as she explores the Pennsylvania insurance exchange. Watch for it on cjr.org, in The Second Opinion section of the United States Project, our politics and policy desk. We hope other media outlets will follow people like Carol. Case studies are a good way to help readers and viewers through what promises to be a confusing time.
No one really knows for sure whether this bold experiment to give more Americans health insurance through the private market will pan out. Much will depend on the price and coverage offered by policies sold in the exchanges, and whether enough young, healthy people will buy them.
Just because some people will be eligible for subsidies doesn’t mean they will not have trouble fitting health insurance into a family budget. Coinsurance and copays and high deductibles will still be barriers to care for many, and these will continue to rise. And in any system that relies on the private market, some people will always be left out. The CBO estimates 31 million fall outside of Obamacare.
The biggest unknown of all is whether the law will really slow down the rise in healthcare costs. That’s related to whether the Obamacare provisions will change the way Americans get care, as its supporters believe. That’s the $1-trillion question.