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.
Subsequent open enrollment periods–or, starting all over again. Insurers usually write coverage for one year. Don’t be surprised, though, if at the time of the next open enrollment you need to change insurers. The one selected this year may no longer be selling in your area a year from now, or some new companies may be sitting it out for this first go-around (many of the big household names in the business are) and will suddenly decide they can make money in this market after all. Or your income could change, meaning your subsidy might be higher or lower. Maybe you’ll want a plan that has a larger selection of docs. Or, maybe your current providers will drop out of the network or be dropped by insurers. In other words, getting and staying covered will hardly be a straightforward affair. There’s nothing seamless about obtaining insurance.
STEP 2 The mechanics: You’ll need an email account to make the process work, and navigators can help people without accounts create one. Next comes a lot of fill-in-the blank stuff–household information, residency, immigration status, and household income. Government computers verify the information and let customers know whether they are eligible for exchange coverage or for public insurance like Medicaid. Some states will allow people to sign up for Medicaid through the exchange; others will send them to state or local Medicaid offices. People with employer-provided insurance may still need to visit the exchange to see if they’re eligible for exchange coverage (they may be, if their share of the premium for employer coverage is more than 9.5 percent of their income).
Employers with more than $500,000 in annual sales that offer group coverage must give all workers a document that tells them about the existence of the exchanges, and the premium that a worker would pay for the lowest-priced plan the employer offers for single coverage. This form lets workers know if their employer coverage is affordable according to the government. If it isn’t, they can shop in the exchange and receive a subsidy. Their families, however, cannot receive a subsidy. This document also tells employees whether the plan meets the minimum value requirement; that is, it’s not one of those bare bones policies that are cheap but cover very little.
Key decision point 1: How much coverage. At this stage, customers will learn how much of a subsidy they can get. Families with incomes around 400 percent of poverty ($94,200 for a family of four) will get a very small subsidy. Those with incomes at the poverty level ($23,550 for a family of four) will get a much larger one. You might hear the subsidy referred to as an “advance premium tax credit,” but whatever it’s called, the amount is the same whether someone buys a cheapie bronze plan or the more comprehensive gold variety. So it’s best to tell readers to come to the computer or the navigator with an idea of how large a premium they can fit in the budget.
Key decision point 2: Special subsidies for low income customers. To confuse the subsidy matter even more, there’s a special subsidy for some people with low incomes. The jargony term is “cost-sharing reductions,” but it means that a family with an income below 250 percent of the poverty level, or $58,875 for a family of four this year, will get a break from paying sky high amounts of coinsurance and copayments. Here’s the catch: They can only get them if they buy a silver policy. That’s a policy that covers only 70 percent of someone’s medical expenses. A family will have to decide whether to buy a policy that’s more comprehensive or get one that’s less comprehensive but helps with cost-sharing.
Key decision point 3: How to use the subsidy. Shoppers will now have to decide how they want their subsidy distributed. Do they want it applied to each insurance payment, which means they will pay less each month for their coverage? Or do they want to collect it at the end of the year like a tax refund?
STEP 3 Choosing a policy: Eventually, shoppers will get to the point of choosing a policy–the hardest decision of all, since it amounts to estimating the medical care you will need in the coming year. That’s tough, unless you have a chronic illness with predictable annual expenses. But the unforeseen happens. Your kid gets hurt playing football, someone has a heart attack or needs eye surgery, and what you end up paying out of pocket for unexpected medial treatment depends on the selection you make when you first sign up.
Key decision point 4: Weighing risk verses coverage. Buying any insurance means weighing risk against the price of protecting yourself from that risk. In this case, it means considering your health, trying to predict what sort of medical problems may arise, and how much you can afford to cover those risks. Usually, the higher the premium, the more comprehensive the coverage. Policies with lower premiums tend to carry more financial risk if you get sick. The choice then becomes which of the four categories of policies give you the peace of mind you’re comfortable with. If someone anticipates a lot of medical care, the more coverage the better.
The platinum policies not offered on some exchanges cover about 90 percent of someone’s medical costs; the gold plans 80 percent; the silver 70 percent; and the bronze 60 percent. As a point of reference, the gold plan is basically the old Blue Cross model that most Americans had for the last four decades and was considered good coverage.
Key decision point 5: Weighing the cost-sharing. Here’s where it gets tricky. Consumers will have to make other trade-offs: Do they want to pay a high premium up front in return for lower copays; a set amount for a service; lower coinsurance; a percentage of the bill; or, a lower deductible? Insurers mix and match these elements of a policy to come up with a price they believe will be attractive. If consumers think they won’t use any or many medical services, then a lower premium might be okay, as along as they don’t get too sick. Others may prefer to pay a higher premium and face lower cost-sharing when they are ill.
Since nothing is certain in this business, the decision hinges on someone’s tolerance for risk. Reporters should tell their audiences not to be lulled into believing that just because all policies must cover 10 essential benefits (like maternity coverage and prescription drugs), all policies are created equal. One company’s essential benefit for, say, physical therapy, might limit the number of visits or the benefit for outpatient surgery might have very high coinsurance, while another company’s won’t have either. Understanding all this means looking carefully at the actual policy. There are, however, some limits on out-of-pocket costs–for 2013, they are $12,500 for families and $6,250 for individuals.
Key decision point 6: Provider choice. Choice, choice, choice! We say we want it, but in the new insurance order we may not get it. As a trade-off for lower premiums, many companies selling in the exchanges are limiting their networks only to those who agree to steep discounts for their services. Those discounts allow companies to offer cheaper premiums. As a result, consumers may find that particular doctors, specialists, or even certain services are not available in the network for a policy they choose. It’s possible insurers selling similar policies outside the exchanges have a better selection. And that brings up yet another thing to think about. Consumers must look to see if their plan has out-of-network coverage. Some plans may not, and that limits consumers’ choices if they want to go to a super duper cardiologist who’s not in the plan. Most plans will have a list of drugs on a formulary that they will pay for. Consumers must make sure their list of drugs matches that of the plan. But beware, next year the plan may have different drugs on their formulary. Should consumers buy outside the exchange? They can, but won’t be eligible for subsidies and they may find policies that don’t provide as much coverage as exchange policies will.
STEP 4 Finding and reading the disclosures: The Affordable Care Act called for a disclosure document to help shoppers compare plans, and the form that was created is pretty good as these documents go. Shoppers can find out about the policy elements, deductibles (and what they apply to), coinsurance and copays for different services (especially common ones like diagnostic tests and outpatient surgery), amounts for different services, and fees. It also spells out some services that are not covered and provides sample charges for common conditions. But consumers must take the initiative to find the disclosures, says Lynn Quincy, senior health policy analyst at Consumers Union. “It’s not the health plans,’ employers,’ or exchanges’ responsibility to insure the consumer has seen these. If a consumer requests one, they have to make it available.” If they have trouble, shoppers should ask the navigators for help finding it or check the website of the insurance companies whose policies they are considering.
When it gets down to a choice of two or three plans either inside or outside the exchanges, shoppers should get their hands on this document. It’s the only way to make a good decision. Oh yes, there’s one drawback: the disclosures do not have to include the price of the insurance. Shoppers will have to get that someplace else.
And there you have it, signing up for Obamacare in four not-so-easy steps. Only time will tell if consumers opt for the cheapest and easiest plan a navigator steers them to, opt out altogether and take the penalty, or wrestle with the complexity heaped upon them and find the best plan for their circumstances. Lots of threads for reporters to follow.
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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for CJR's Covering the Health Care Fight. She also blogs for Health News Review and the Center for Health Journalism. Follow her on Twitter @Trudy_Lieberman.