INSURANCE CONSUMERS
Officials recommend shopping around for cheaper plans
should be ready to shop around, federal officials advise.
WASHINGTON — In Tennessee, the state insurance commissioner approved a 36 percent rate increase for the largest health insurer in the state’s individual marketplace. In Iowa, the commissioner approved rate increases averaging 29 percent for the state’s dominant insurer.
Health insurance consumers logging into healthcare.gov today for the first day of the Patient Protection and Affordable Care Act’s third open-enrollment season may be in for sticker shock, unless they are willing to shop around. Federal officials acknowledged Friday that many people would need to pick new plans to avoid substantial increases in premiums.
But, they said, even with a number of companies leaving the marketplace for health insurance under President Barack Obama’s health care law, most people around the country will still be able to choose from three or more insurers in 2016.
“Shopping can save you money,” said Richard Frank, an assistant secretary of health and human services, who unveiled a huge collection of data on health plans that will go on sale today in the 38 states served by healthcare.gov.
Consumers have until Jan. 31 to sign up but must do so by Dec. 15 to obtain coverage starting Jan. 1.
Frank, on leave from his position as a professor of health economics at Harvard University, described the data in a positive light. “The Affordable Care Act has created a dynamic, competitive marketplace, with considerable choice and affordable premiums in 2016,” he said. Consumers are not so sure. “It really shocks me to see these plans with $5,000 deductibles,” Belinda Greb, 56, of Vida, Ore., said in an interview. “It becomes an area of stress as opposed to making me feel secure.”
Federal subsidies for lowand moderate-income consumers will keep pace with premiums for a benchmark plan, the second-lowest-cost “silver” plan, Frank said, and consumers who choose that plan can protect themselves and their wallets.
“The vast majority of marketplace consumers receive tax credits that insulate them from premium increases,” Frank said.
A typical family of four with annual income of $60,000 will, on average, receive tax credits totaling $5,570 in 2016, up from $4,850 this year, the administration said.
But some consumers who have recently received renewal notices have been shocked by the decisions they face.
Greb said she was too upset to finish a letter she got recently from her insurer, Moda Health, that said her “bronze” health plan, for which she pays $213 a month after a subsidy of $175, would not be offered through the exchange in 2016. The company offered her a similar plan that would cost $265 a month if her subsidy stays the same.
The new plan recommended by Moda has a deductible, the amount she must pay for care before the insurance begins to pay, of $5,500, up from $4,250 in her current plan, she said. “People are putting off care because of the expense.”
The Obama administration said nearly 9 of 10 consumers with marketplace coverage would be able to choose from three or more insurers in 2016. That is important, Frank said, because in insurance and other industries, “competition intensifies when there are three or more firms in a market.”
In general, he said, “places with fewer insurers have higher premiums.”
The number of choices varies greatly. Consumers in the online marketplace can choose from 17 insurers in Ohio and Texas, 16 in Wisconsin, 15 in Michigan, 12 in Pennsylvania, 11 in Oregon and Virginia, and 10 in Florida and Illinois.
But, an administration report said Friday, only one insurer is offering coverage in the marketplace in Wyoming, and consumers have a choice of just two insurers in Alaska, Hawaii, Oklahoma, South Dakota and West Virginia. And that data, as of Oct. 19, did not reflect the recent collapse of nonprofit insurance cooperatives in South Carolina and Utah.
Brian Forrester, 48, of Punta Gorda, Fla., said he was pleased with the outlook for his coverage next year. Healthcare. gov indicated that the subsidy for his plan, provided by Blue Cross and Blue Shield of Florida, would increase more than the premium, so he would pay less: $98 a month, rather than $107.
Forrester, a part-time driver for Uber, said he had used his insurance only to get a flu shot this year. “With my payment and subsidy,” he said, “Blue Cross will receive a little over $4,000 this year, and all they had to pay out is $12.71 to the pharmacy at Publix for a flu shot. I am the kind of customer that they want.”
BlueCross BlueShield of Tennessee said the 36 percent rate increase was necessary because it had lost money on its marketplace business after underestimating the use of health care by its new customers.
The Iowa insurance commissioner, Nick Gerhart, approved rate increases averaging 29 percent for Wellmark Blue Cross and Blue Shield, the state’s dominant health insurer, and 20 percent for Coventry Health Care. The higher rates, he said, were justified based on the plans’ experience.