Navigating the labyrinth: A primer on Obamacare enrollment for health reporters

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THIS WEEK MARKS THE START of a truncated and interrupted Obamacare open enrollment season, during which numerous Americans will make critical decisions concerning their healthcare with less notice and support from advertisers and navigators. The Trump administration has both abbreviated and complicated enrollment; the process is “across the board, harder—more of a labyrinth,” writes The New Yorker’s Amy Davidson Sorkin.

A review of Obamacare stories from regional news outlets published in the past several weeks suggest potential enrollees haven’t received the sort of navigational help many might need. Newspapers passed along GOP talking points about “death spirals” and an Obamacare collapse, or failed to explain the often incorrect recommendations from state insurance department officials. And too many newsrooms passed along that classic and trite consumer line—“shop around”—without saying how people should do that.

ICYMI: Plagiarism scandal hits newspaper 

The task of buying health insurance is always complex, even in the best circumstances. Without clear explanations of how the elements of an insurance policy work together to determine what someone pays for healthcare, potential enrollees are flying blind.

Indeed, confusion has become a fixture in coverage. “In Miami-Dade, you have so many choices of plans,” a health-policy expert told the Miami Herald. “And now to work through the logistics and figure out the interaction between premiums, deductibles, co-payments, co-insurance rates, no cost-sharing reductions and a higher premium tax subsidy, it just becomes a very complex decision-making process that, I tell you, even with my PhD, I find it confusing.” An enrollment advocate in Texas told an Austin-based NPR station that public confusion rivals that from Obamacare’s first year:

“People don’t understand that the Affordable Care Act is still the law. They don’t understand the mandate is still in place to have insurance. So, there is a tremendous amount of confusion and that we are very concerned is going to limit enrollment this year.”

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But confusion must be reckoned with. While health-insurance policies are complicated, reporters can play a critical role in helping enrollees navigate costs and benefits during enrollment.

CJR created a two-part primer to help reporters set the stage for enrollment and then guide their audiences through the process. In the first part, we outline three important pieces of context that can help prepare reporters and would-be enrollees for their encounters with the health exchanges. In the second, we examine four questions that reporters might use to help enrollees select a policy.

ICYMI: Reporter gets Trump administration statement. You can probably guess what happened an hour later

 

TRENDS TO EXPLAIN BEFORE ENROLLING

  1. HIGHER PREMIUMS

Although the GOP’s anti-Obamacare rhetoric has made it seem that the Affordable Care Act is responsible for high premiums this year, that’s not entirely the case. Insurance premiums usually rise each year because the cost of medical care continues to go up, and because we are using more services every year. When setting premiums, insurance carriers also consider whether, in the previous year, they had more claims from sicker people than they had planned for. If a lot of people with policies got sick and cost a company lots of money, then that company will likely factor the continuing costs of those conditions into premiums. In general, fewer healthier people (who did not need to file many claims) signed up for 2017 to balance out those enrollees with costly health needs. Most companies anticipate that trend will continue in 2018.

Uncertainty sown by the Trump administration, no fan of the ACA, has also contributed to a rise in premiums.

Will the mandate requiring people to buy coverage be enforced? Yes, apparently.

Will the federal government continue to pay for cost-sharing reductions (CSRs), subsidies that help families with very low incomes afford their deductibles and coinsurance? No, but qualifying customers will still receive them—the government just won’t reimburse insurers for providing the subsidies.

Anticipating that loss of income, insurers raised premiums—generally only for their silver plans in most states—to compensate.

 

  1. HIGHER PREMIUM SUBSIDIES

Under the ACA, insurers can sell bronze, silver, gold, and platinum policies. Bronze plans offer the fewest benefits and, often, the lowest premiums. Platinum plans offer the most benefits and tout the highest premiums. Platinum plans were not always sold, so gold plans were usually the costliest plans on state exchanges. Silver plans were the most popular, because eligible shoppers had to buy them to get cost-sharing subsidies (CSRs).

For some families, these subsidies may be large enough to buy a bronze plan at no cost. Reporters can look for those policies on their state exchanges and flag them for their audiences.

This year is different. Both bronze and gold policies may have lower premiums than silver ones. Why? Because insurance commissioners in many states required or allowed insurance carriers to plan for the potential loss of government money by stacking the financial hit only on the silver policies, instead of requiring them to spread it across bronze, silver, gold, and platinum plans. That means shoppers will often find bronze and gold policies with lower premiums than the silver policies offered by an insurer. Logic would suggest, then, that gold policies might be a good deal this year.

The Affordable Care Act mandated another kind of subsidy, sometimes called a premium subsidy (other times, a “tax credit subsidy”), to help families with incomes below $98,000 lower their premiums. The value of that subsidy is based on the second lowest-priced silver plan in a coverage area. As a result, higher premiums for silver plans mean higher premium subsidies for all eligible shoppers.

Enrollees “are getting a larger premium subsidy, more generous than they otherwise would have gotten had the federal government continued to reimburse insurers for CSR subsidies,” says Jim O’Connor, a consulting actuary at Milliman. “These premium subsidies can be applied to any plan purchased on the exchange, not just silver plans.” For some families, these subsidies may be large enough to buy a bronze plan at no cost. Reporters can look for those policies on their state exchanges and flag them for their audiences.

 

  1. STICKER SHOCK FOR FAMILIES

Expect to pay a lot more for your children if you don’t qualify for a premium subsidy. The federal government changed what are called “age rating factors” that insurers must use in pricing their policies. This year, the premium factor for kids up to age 14 increased by 20 percent. For kids ages 15 to 20, the increase is even higher—from 31 to 53 percent.

“People with three or more kids and little or no premium subsidy may really feel the impact of this change,” says O’Connor. While the adult portion of the premium may decrease slightly due to this change, the children’s portion of the premium will increase around 20 to 50 percent, depending on the child’s age. “This change, particularly coupled with other factors, could introduce sticker shock for those not receiving [any] government subsidies,” says O’Connor.

 

You can’t base your decision solely on premiums, although many families do

 

QUESTIONS TO ASK BEFORE CHOOSING A POLICY

Choosing a policy involves some slogging through what will strike many would-be enrollees as a dizzying number of options on state shopping exchanges. I searched for policies on the Oregon exchange for a hypothetical family—husband and wife, both age 51, with a 12-year-old child, $70,000 combined annual income, and a Portland zip code. I came up with 31 policies—way too many for anyone to process and make a wholly confident decision. (Reporters can do the same by shopping on their exchanges and sharing what they learn with their audiences.) Still, a decision must be made. The following four questions can help narrow options—for readers, and for reporters who hope to help them.

 

  1. WHAT KIND OF SUBSIDIES WILL YOU RECEIVE?

Obamacare is based on subsidies to make it easier for people to afford insurance. The first thing to consider is whether your family is eligible to receive one. Premium subsidies are available for families with incomes under 400 percent of the federal poverty level—this year, that’s about $98,000 for a family of four, and $48,000 for a single person. Those people with the lowest incomes get the largest subsidies, while those with the highest incomes under 400 percent of the federal poverty level get the smallest. Because these subsidies gradually get smaller as income rises, families with incomes above the federal median income, $59,000, have felt the pinch of higher premiums during the past few years. Shoppers can find out whether they receive a subsidy, and how much it is, by logging onto the shopping exchange in their state. For the hypothetical Portland family, their monthly premium subsidy is $726.

Cost-sharing reduction subsidies help families with incomes below 250 percent of the federal poverty level—this year, that’s $61,500 for a four-person family, and $30,000 for an individual. Those subsidies reduce how much people have to pay for deductibles, coinsurance, and copays—policy elements that determine your real cost of health insurance. How much that subsidy is worth also depends on family income. These subsidies cover 94 percent of the out-of-pocket costs for those whose incomes are right at the poverty level; they pay 73 percent for those with incomes at the 250 percent cutoff. They are a huge help to families with low incomes.

Cost-sharing reductions have been frequently featured in the news recently, so it’s important for reporters to explain how valuable they can be to families—especially given the high deductibles and coinsurance required by many policies.

 

  1. HOW MUCH INSURANCE CAN YOU AFFORD?

The hypothetical Portland family could spend between $222 and $1,231 per month, depending on which plan they choose, after taking into account their premium subsidy of $726. But you can’t base your decision solely on premiums, although many families do. All individual market policies sold on or off the Obamacare shopping exchanges must offer coverage for 10 essential medical services, which include hospital and doctor services, emergency care, pediatric care, mental health treatment, and drug coverage, among others. Drug coverage varies according to a plan’s formulary and to cost-sharing features like coinsurance. While all plans must cover other mandated services, they can vary the cost-sharing and care-management features. It is those cost-sharing features that differentiate plans and determine the real cost to you.

 

  1. HOW MUCH RISK ARE YOU WILLING TO TOLERATE?

This is key to the true cost of a policy. If you are healthy, and think you (or the hypothetical Portland family) won’t get sick during the year, then you might be brave enough to take your chances on an inexpensive policy. But the real cost of healthcare is the interplay between premiums, deductibles, coinsurance, and copays. Sales pitches, advertisements, and tweets like this one can act like lowball come-ons that leave people financially stranded if illness hits. If the thought of thousands of dollars in out-of-pocket costs scares you, then you’ll need to pay more in premiums to protect yourself.

For healthcare reporters, questions about how much risk people in your community are willing to assume, or how large a bill they can comfortably pay, are good subjects for man-on-the-street interviews.

A policy with a low premium often comes with high deductibles and other high out-of-pocket costs. Let’s look at our Portland family again.

With its monthly premium subsidy of $726, the Portland family decides to spend $222 each month for a bronze plan, which gets them a $13,000 family deductible and a $14,700 out-of-pocket maximum, the most any insurer can charge next year. After meeting the deductible, the family would still have to pay 50 percent coinsurance—half the bill for emergency room care, or generic drugs, or visits to primary care doctors and specialists. If the family increased its premium to $1,231 for a gold plan, then the family deductible would drop to $2,000, and the out-of-pocket maximum would be reduced to $13,700. As a trade-off for the higher premium, the family’s coinsurance and copays would be vastly reduced. The family would then pay only 20 percent coinsurance after paying the deductible for ER care, $10 for generic drugs, $20 for a primary care doctor visit, and $40 for specialists.

For healthcare reporters, questions about how much risk people in your community are willing to assume, or how large a bill they can comfortably pay, are good subjects for man-on-the-street interviews. Is the relationship between premiums and out-of-pocket costs well-understood by your audience? How will families pay for potentially high medical expenses in cases when their insurance won’t pay?

 

  1. CAN YOU BE SURE THE CARE PROVIDERS YOU WANT TO USE ARE IN THE PLAN’S NETWORK?

The short answer is no. You can never be certain. Booklets describing each policy may provide you with some insights, but sometimes they are out-of-date. You can call a physician’s practice, but staff may not necessarily know, and office personnel have been known to make mistakes. You may, perhaps, require an operation, but not know whether all the doctors attending you are in the network. The result can be a surprise medical bill, a problem the health system has yet to solve. You may also encounter tiered networks, where insurance companies put pricier physicians and hospitals in a tier that comes with either higher premiums or higher out-of-pocket costs, a tradeoff that may be important.

With the open enrollment window shortened from three months to just six weeks and neutral navigators in short supply, reporters have an important responsibility to combat confusion on behalf of the American public. Let’s hope they can do the job in half the time.

ICYMI: NYTimes publishes stunning visual forensic investigation

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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.