I had a meeting earlier this week with the sales manager for an insurance company that will sell plans on the the Arizona Exchange. You will hear the exchange called the “Marketplace” in many advertisements leading up to October 1st when the Marketplace opens for business.
I’m not going to name the company because I haven’t seen the details of other companies’ plans yet. And there was no talk of premiums because these are big secrets. I guess each insurance company thinks their competitors will see their premiums and undercut them to get a marketing advantage. So we may not know what these plans will cost until October 1st – or whenever the feds release the information, since they are running the Arizona Exchange/Marketplace.
Individual and Family Plans
In order to get help with premium costs, people must buy their health insurance through the Exchange/Marketplace. See the chart from a past post for who qualifies for this help.
On the Exchange/Marketplace, this company will offer one Gold Plan, two Silver Plans, and one Bronze plan. The Gold Plan and Silver Plan #1 will have lower out-of-pocket cost limits than what is required by Obamcare. Thus these two plans will be more expensive than Silver Plan #2 and the Bronze plan.
The Silver Plan #2 and the Bronze plan will have the required out-of-pocket limits of $6,350 for an individual and $12,700 for a family. Each of these plans will have co-pays for most medical services: unlimited doctor visits; urgent care; emergency room; ambulance; routine vision exams; prescription drugs. These services are not subject to the deductible, so this makes these plans a lot like employer plans (except they have much higher deductibles than most employer plans).
Hospitalization and maternity services (except for doctor visits) are subject to the plan deductible.
These plans are very different from the current plans offered by this company in that current plans generally put every medical service under the deductible. So until the deductible is met, a person pays the full medical bill. When the deductible is met, the plan becomes an 80/20 plan or a 60/40 plan. This means the plan pays 60% of the bill and the patient pays 40%. That is how current individual health insurance works.
The new plans are very different and a lot better….and therefore will be more expensive. But people enrolling through the Marketplace will get help paying their premium.
People whose income is too high for premium help will probably buy their health insurance off the exchange/marketplace.
Off the Exchange/Marketplace, this company will offer another dozen plans (!!!) with different deductibles and combinations of co-pays and co-insurance. It looks like these plans will be less expensive than those sold on the Exchange because they put more cost on the patient. Maybe the term “risk” is more accurate because, if a person picks a plan with a higher deductible, say $6,000, they will pay most of their medical bills until they hit the deductible. But again, their out-of-pocket limit cannot be higher than $6,350.
My head was hurting after this meeting as I tried to comprehend all the choices this company will offer. And I’m not even counting the small business plans that will be offered on and off the SHOP (Small Business Health Options Program).
If the other four companies that are going to be on the exchange have the same number of plans……. How are brokers going to truly understand all of them? I suppose this is why brokers tend to pick one company and sign up their clients with that company’s plans. There are just too many plans to learn all of them.
Price will be key.
While brokers tend to focus on one or two companies to keep things simple, they will probably want to contract with every company in their market because the actual premium cost will drive a lot of business. And we may not know the premiums for each plan until October 1st when the Marketplace opens for business. In the meeting I attended, it was said that one company on the Arizona Marketplace is expected to be “very aggressive” in their pricing.
Insurance Brokers with years of experience know the companies and their networks and how easy (or difficult) they are to work with (from doctors’ and patients’ perspectives). Brokers might not focus on price alone, but often consider insurance companies’ reputations with doctors.
But what about Navigators who are not allowed to have insurance sales experience? Price will be all they understand when helping people compare plans. And if Navigators are not allowed to recommend a plan, the only differentiating factor for the consumer will be price…. and maybe advertising.
If people have seen a company advertisement on TV, it does make a difference. I have seen this with my Medicare clients who say, “Oh, I want that plan because I’ve seen them on TV”. Really.
Lots of Choices on the Arizona Exchange
I got a sneak peek at what Arizona health insurance plans will look like under Obamacare, and the abundance of choices seem overwhelming to me – and I’m in the insurance business.
I wonder how the folks who need health insurance will deal with all their options. Will they be confused? Will they understand the different deductibles and co-pays? Or will they choose based on the lowest price when they see the premium minus their subsidy?
Maybe I should just stick with the Medicare market. It is a whole lot simpler than the under-65 market. People on Medicare have choices, but they just seem clearer and more manageable to me. I love Medicare!