Not long ago, freelance health writer Debra Gordon sent out an SOS on a listserv for health reporters. Gordon was writing a consumer piece walking readers through the process of signing up for the new health insurance exchanges. She quickly realized that neither shopping for insurance nor writing about the shopping process was easy. “I spent about four hours just trying to figure out what I’ll need to fill out the application and it still is confusing,” she told the listserv.
Gordon was really speaking for all journalists who will have to explain this complicated chore to the public. While the Secretary of Health and Human Services said signing up for health insurance will be like buying an airline ticket from Travelocity, it won’t be. Buying an airline ticket to Paris is a lot easier and much more fun than understanding coinsurance from Blue Cross.
Inspired by Gordon and other health reporters who have asked about the nitty-gritty of selecting a policy, I stopped by to see Elisabeth Benjamin, a vice president at the Community Service Society in New York City, an organization that currently runs an insurance counseling program and will help navigators help consumers. I figured she knew a thing or two about signing up. My head was spinning after our conversation—the decision points, the trade-offs, the bureaucratic requirements, the mumbo-jumbo to comprehend. Nevertheless, our conversation was useful, and I offer a distillation of her suggestions and some of my own for reporters to use in preparing their stories.
For starters, it’s best to think of buying insurance in the exchanges as a four-step process that includes several key decision points. Forget all that extraneous stuff that is the focus of too many stories—the politics of Obamacare, the prognostications about premiums, the latest academic study. Audiences care little about that as they face the daunting challenge of selecting coverage.
STEP 1 The health insurance buying cycle: A good way to think about shopping for exchange coverage, Benjamin suggests, is a cycle with four phases.
Initial enrollment. From October 1 though the end of March 2014, the 24 or so million Americans eligible for exchange coverage can sign up online at HealthCare.gov or with the help of specially trained navigators. That includes people already in the individual market and those who are newcomers. Those who have employer coverage, Medicare, Medicaid, or the Children’s Health Insurance Plan are not eligible. People who are sick and have lots of preexisting conditions will be able to get coverage in the exchanges, and that is a pretty big deal for those now shut out of the insurance market. When first enrolling, consumers will need household information, residency status, employment information, and, of course, income details, which will determine eligibility for subsidies to help pay premiums that for many families will not be cheap.
Mid-year enrollment changes. Families change, incomes go up or down, people move, eligibility for subsidies comes and goes. Although the law says there is only one open enrollment period each year, insurance companies and states may allow special enrollment periods for certain qualifying events. Failing to sign up for insurance during open enrollment, later getting sick, and then needing insurance is not one of them. Someone taking this risk is out of luck until the next open enrollment period, which may be months away. Beginning in 2015, open enrollment will start October 1 and end December 31.
Reconciling with Uncle Sam. Just because at sign-up time the computer spits out a number—the subsidy you are entitled to when you present information about your income—doesn’t mean that’s the subsidy you’ll eventually get for the year. If your income goes up during the year, the subsidy you’ve received might be too much, and you’ll have to repay it in your tax bill—in effect, turning the subsidy into a loan. It works the other way, too. If your income decreases, you might find yourself with a welcome tax credit. Of course, this could mean disputes with the IRS. The reason for all this: the infamous clawback provision. Soon after Obamacare became law, the business community complained mightily about some tax reporting requirements intended to raise about $22 million to help finance the subsidies. Congress let businesses off the hook, but needed a way to restore the lost revenue, and they got it from people—you guessed it—who buy in the exchanges.