A few days ago Dennis Myers, the news editor of the Reno News & Review, sent along a press release about Nevada’s insurance exchange, called Nevada HealthLink. I glanced at it quickly, thinking it had come from the Nevada Division of Insurance, the state’s regulator in Carson City. It said “FOR IMMEDIATE RELEASE” in the top right corner, gave the name of a contact in the left, as news releases typically do, and it carried the headline “Nevada HealthLink Details Update.” I read on. Four companies would be selling in the exchange, the release said, one of them a co-op, one of those special creatures the law authorized before a midnight Congressional deal to stop short of the fiscal cliff halted further development of those still in the pipeline. Each of those companies selling on the exchange would offer so called “silver” and “gold” policies, which the law requires them to do.
Unlike announcements from other states, the release matter-of-factly said that rates were not final yet, but that “the estimated rates posted for all eight of these 2014 plans are higher than the cost of the comparable 2013 plan purchased today.” It advised that in some cases 2014 rates “are over twice as expensive as the same plan purchased during 2013.”
Hmmm…. The same plan? Those who have been paying attention know next year’s plans are not the same, because they must offer the 10 essential benefits required by Obamacare. In other words, next year, under Obamacare, health insurance will have better benefits. Comparing them to this year’s plans is like comparing apples to pomegranites. I was getting suspicious. With all the attention on pricing—rate shock or lack thereof, would an insurance regulator make that mistake?
No, it turns out. And the last graph seemed out of character for an insurance regulator’s news release. It sounded like a sales pitch telling consumers who have “minor pre-existing conditions” and make more than 250 percent of the federal poverty level it might make financial sense to buy a 2013 plan right now, noting “all qualified 2013 health insurance plans will help individuals avoid the upcoming 2014 tax penalty, and they may reduce the cost of the coverage dramatically.” Why that’s exactly what some insurance companies, working with their agents and brokers, are urging consumers to do. As we’ve pointed out, this strategy—pushing people to sign up for current plans for another year before the January 1 Obamacare deadline—helps them retain healthy people in the risk pool to soften the financial wallop they expect when so many sick people gain coverage. Insurers are still none too happy about having to insure millions of people with serious medical conditions.
Indeed, the news release had come not from the Nevada Division of Insurance at all, but from a Reno brokerage firm Health Benefits Associates, a seller of health insurance whose owner, Kevin Sampson, wrote the release and the firm sent it to local news media and various PR newswires. At the very end, the release advised that people could call Sampson, email him for more information, or set up an interview. So I did.
Sampson told me he writes one or two releases each week “on the latest developments that come up” and attends every meeting of the Nevada exchange, adding that the exchange was “so short-staffed everyone is trying to help each other.” He also said ordinary people were calling every single day, wanting more information about Obamacare and buying coverage. Sampson’s marketing effort seemed designed to offer that information—and make some sales commissions while he is at it.
Meanwhile, since he was so forthcoming about his business strategy, I took advantage of the opportunity to ask a few questions of a broker with the proverbial boots on the ground. Before our conversation, I had examined the proposed rates on the http://www.nevadahealthlink.com/ Nevada HealthLink website. They did show what the law intended to happen. Older people will pay more for their insurance than younger ones, although the law limits that difference to three times what a younger person would pay. A 25-year-old living in southern Nevada and buying an HMO policy from Anthem will pay around $232 for a silver policy that covers only 70 percent of medical costs while a 60-year-old will pay around $626. Gold plans, which cover 80 percent of the medical bills, cost more. The 60-year-old in this example would pay about $866 a month—$240 more than he or she would pay for the less generous coverage from the silver plan.
The rates for the Nevada Health CO-OP HMO appeared very high. During the debate, co-ops were promoted as a cheaper alternative to more conventional coverage. Sampson explained that the rates in this one, run by casino owners and large restaurants, were not competitive because the co-op is aimed only at the Las Vegas market, and offers only very narrow networks of providers. l
Sampson pointed out that all the plans in Nevada offered on the exchange were HMOs. No PPOs, a less restricted kind of managed care, were among the offerings. There were no bronze or platinum plans either. Bronze plans are low-end policies covering only 60 percent of someone’s expenses; the platinum ones the high-end covering 90 percent. Sampson also mentioned there would also be extra premiums in the $60 range for pediatric dental benefits, which the law calls for, a topic so far not discussed in most exchange coverage.
What’s the lesson from Nevada? It’s that all kinds of groups and individuals will be offering information to the public about the choices people have under Obamacare—and to journalists, who need to separate the sheep from the goats before running with a press release.
And if you find a friendly insurance broker, cultivate him or her as a source, all the time being wary of his particular spin. I am schizophrenic about agents and brokers. God knows I’ve heard enough of their sales pitches to know what they have to say to make a sale. But they do know the guts of their products and how they work, and that is precisely what reporters covering the implementation of Obamacare have to understand.
Forget the policy wonks on K Street. Forget the insurance companies—they have circled the wagons and won’t talk much, if at all. Be wary of the advocates. You should even be careful with the so-called navigators, a role created by Obamacare to help people enroll in the exchanges. Some may know their stuff; others won’t. Agents and brokers, however, can tell you a lot about the insurance products they sell. You just have to be wary of the sales pitch.
Exchange Watch: California Dreaming
Follow @USProjectCJR for more posts from Trudy Lieberman and the rest of the United States Project team, including our work on healthcare issues and public health at The Second Opinion. And for Trudy’s resource guide to covering the ins and outs of buying insurance on the state exchanges, see Open Wide, from CJR’s new July/August issue.