Check the Fine Print: Healthcare Exchange Plans Cost Thousands More

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Sticker shock strikes again. This time, those who were lured by low-priced premiums on the exchange are taking the hit. According to Sandra, an insurance agent in Tennessee, these attractive prices often come with fine print, which isn’t necessarily disclosed in the initial push for enrollment.

 

“I’ve noticed deceptive PR tactics in trying to sell Obamacare. For example, an ad tells how one can purchase a mid-tier plan for only $238 per month. What it does not tell is that mid-tier plans pay only 50-50 of the cost as opposed to the traditional 80-20 plans nor is there a co-pay to see the doctor. The networks are more limited, and deductibles are higher,” she explained.

 

For first-time buyers who are only looking at monthly premiums, these unexpected out-of-pocket costs could turn their “affordable” coverage into an expensive undertaking, as pointed out by Crain’s:

 

“[P]eople may hurry to choose plans with cheap monthly payments on a new insurance marketplace. But they may be surprised, especially if they’ve never had coverage before, to find they’re still on the hook for thousands of dollars in out-of-pocket “deductibles,” a standard part of most insurance policies.

Many will find they must pay costs up to $6,350 — on top of their monthly premiums — before their insurance pays anything for actual medical care. If they have a family, they may have to pay nearly $13,000 in an out-of-pocket “deductible” before insurance starts paying.”[1]

 

Describing it as simple cost-shifting, Sandra believes it is important for buyers to know their overall out-of-pocket expenses upfront, so they can make an informed decision about a plan’s affordability. While those in the exchange are typically forced to choose between a higher premium or higher deductible, that doesn’t always have to be the case. Sandra’s company offers a plan that strikes the right balance between the two, making the cost more palatable for young adults.

 

“I can sell a 25-year-old adult an 80/20 plan with a $600 deductible for a monthly premium of only $125.50 per month. They would be in a large network of hospitals and doctors. No, this plan does not have the long list of preventive care, but it offers excellent coverage for a fair price,” stated Sandra. “The age group I quoted is the group that will supposedly be hit the hardest with high premiums under Obamacare.”

 

Along with the less-than-transparent tactics, Sandra also expressed deep concern about the law’s sustainability, “I personally do not believe it is financially sustainable because they are not going to get that demographic – young, healthy people – to come into the plan.”

 

Health insurance industry consultant Robert Laszewski shares similar concerns, especially with the Administration’s announcement to extent non-compliant plans for another two years.

 

“The fundamental problem here is that the administration is just not signing up enough people to make anyone confident this program is sustainable.” [2]

 

Though the department has reported that 4 million have signed up for health care plans through one of the program’s new insurance exchanges, that number drops to 3 million when individuals who haven’t kept up with paying premiums are included (about 20% never paid the first month’s premiums, and an additional 2 to 5% haven’t paid the second month’s premium, Laszewski writes, citing insurance carriers).

 

That isn’t enough to create a sustainable risk pool with a critical mass of young and healthy enrollees to offset the cost of covering older and sicker individuals who are now guaranteed an offer of coverage.”

 

With nearly 25% of enrollees not following through on their payments for coverage, it could be soon discovered that Obamacare’s “affordable” premiums were simply a ruse.