Insurance shoppers told to hang in there, study, choose wisely

October 6, 2013

By Joey Holleman, The State

COLUMBIA, SC — Now that details of the Health Insurance Marketplace plans available for South Carolinians have been revealed, experts worry about how people will deal with the complexity of the plans.

They warn shoppers on healthcare.gov not to throw their arms up in confusion and just go with the cheapest plan.

Thousands of South Carolinians will be choosing among 27 plans (32 in some counties) with a wide variety of options. Most of the shoppers have little or no experience in health insurance terms, but they are required to have insurance in 2014 or face penalties under the Affordable Care Act.

It’s not like picking up a gallon of milk at the grocery store.

“Looking at the premium is not the best way to pick a plan,” said Megan Weis, associate director of the S.C. Institute of Medicine and Public Health. “You need to look at the details.”

Sorting through

The details can be confusing, even for insurance professionals. Each of the four companies on the marketplace in the state, and each of their plans, has a different way to break down the costs. While annual deductible and out-of-pocket expenses are the biggest factors, some plans offset those with lower co-insurance. Some do it with co-pays that make it less expensive to visit a primary care doctor. Some offer better payment on prescription drugs. Some offer plans that have an additional deductible for every family member, while others have one annual deductible for the entire family

The provider networks aren’t available online for all companies and in some cases are still being updated. That’s important because people want to know if their new insurance will pay for visits to the doctors they’re used to seeing, or to the hospital nearest their home.

After perusing the plans, Steve Hinson, an agent with Insurance Management Group in Columbia, was amazed. “These are nutty, even as an agent that looks at it all the time,” he said. Considering the variety, he said it’s scary that some people will be buying on the marketplace without help from experts.

Unlike Medicare supplement plans, which are basically the same for all of the companies that provide them, the new marketplace plans have wide differences, Hinson said.

As with any insurance purchase, people have to weigh risks and rewards. If they visit doctors often, they probably should aim for the highest premium they can afford with the lowest annual deductible. If they are seldom sick, they probably should go with the high-deductible, low-monthly-premium plans.

But with the variety of plans offered and the different levels of government assistance for different plans, the new Health Insurance Marketplace isn’t that simple for all shoppers.

“If they have access to a broker, they should use one,” said Katheryn Wonder, assistant director of community relations at Consumers’ Choice Health Plan, one of the four companies on the marketplace in the state.

Consumers’ Choice, for instance, technically offers eight plans – two in the gold level, three in the silver level, two in the bronze level and one catastrophic plan available only to those 29 and younger. In theory, gold level offers the best coverage, but costs the most. In reality, silver plans might be cheaper choices than gold plans for low income families.

The same vagaries apply for policies from the other three companies on the marketplace – BlueCross BlueShield of S.C., BlueChoice Health Plan and Coventry Health Plan of the Carolinas.

Silver and gold (plans)

The cost-sharing function of the Affordable Care Act kicks in for an individual earning less than about $29,000 annually or for a family of four earning about $53,000. The medical expenses paid by the policy holder decrease based on their income. Low income shoppers also benefit from tax credits.

If you enroll in the top Consumers’ Choice silver plan, the annual out-of-pocket cost is $2,000 without cost-sharing. But if you make $17,000 a year, you would be eligible for the maximum cost-sharing, and pay only $75 annual out-of-pocket; someone making $23,000 would pay only $250 annual out-of-pocket.

One important note: Cost-sharing is offered only for silver-level plans. That makes silver plans a better deal than gold plans for low-income shoppers. For instance, Consumers’ Choice’s top gold level plan has an annual out-of-pocket of $600 for everyone (higher than the silver plan for people eligible for cost-sharing) and it’s premium is about $90 more per month than the top silver plan.

Not only is silver better than gold in some instances, but silver also can be less expensive than bronze in others.

Premiums for the cheapest Consumers’ Choice bronze policy are $90 per month less than the top silver policy. That’s $1,080 less over a full year. But that bronze policy pays for almost nothing but the basics – wellness visits, some immunizations, some screenings – until policy holders reach $6,350 in deductibles. A low-income policy holder who needs medical care seven or eight times in a year likely would spend more for the health care under the bronze plans than the silver plan, which has small co-pays for each visit.

Bronze plans, however, might be a better deal for healthy higher income young people, Wonder said. But Wonder and Hinson warned that anyone buying a bronze policy is making a gamble they will remain relatively healthy for the next year. Bronze plans cover very little and have high deductibles and out-of-pocket expenses. They will, however, prevent financial ruin if the policy-holder has long-term hospitalization or major surgery costs.

Hinson, who worked for BlueCross BlueShield for years, said the insurance giant has offered policies similar to the bronze level policies for a long time, and nobody would buy them once agents explained the terms.

That’s why it’s important to get expert advice before hitting the “buy” button on the healthcare.gov.

Professional help

Frank Knapp, president of the S.C. Small Business Chamber of Commerce, cautioned that it’s important to work with an independent agent licensed to sell to all four companies on the marketplace.

One resource for finding an agent certified to sell on the federal marketplace is the National Association of Health Underwriters website, nahu.org. Click on “Find an Agent,” then go down to the section on agents certified on the exchange marketplace and check “South Carolina.” If you don’t find an agent near you, refresh the page. It shows only 20 agents at a time in random order.

And don’t deal with an agent who asks for money up front. The commission is built into the premium cost, whether you use an agent or not.

“You’re paying for professional help,” Knapp said. “Use it.”

Still confused?

Get help from a certified insurance agent

One way to find agents certified to sell on the federal marketplace is the National Association of Health Underwriters website, nahu.org. Click on “Find an Agent,” go down to the section on agents certified on the exchange marketplace and check “South Carolina.” If you don’t find an agent near you, refresh the page. It shows only 20 agents at a time in random order.