We are coming off COBRA and I needed to sign us up for health insurance for next year. Silly me, I thought with the Affordable Health Care Act, the offerings would be complete and “affordable”. The reality is that the process is a nightmare and the offerings are incredibly complex and filled with outs for the insurers. My wife and I are both under 65 so we don’t qualify for Medicare and I suspect that those are better programs.
My wife and I have Blue Cross coverage and it seems to be well accepted, so I thought that it would be a good place to start. The primary care physician told us that she accepts Blue Cross so that was the direction that I took. The problem is that on healthcare.gov, there are several offerings from Blue Cross and a wide range of limitations. The biggest surprise was that the lower level policies have deductibles in the $10,000 to $15,000 range. If you look at the premium offerings to get the deductible down, the cost increases to a point where you are essentially paying the $10k to $15k deductible as part of the premium over 12 months. There are many preventative care procedures that are fully covered and drug benefits that have a low copay for generics, but if you get sick, injured in an accident or hospitalized watch out. While the deductibles are outrageous, at least they are clearly disclosed.
In reviewing the “silver” plans available from Blue Cross, I found two that looked reasonably complete. The plans looked identical based on the headline coverage, but the premiums were $150 a month different. In looking at the details of the plans, the lower cost plan had slightly higher deductibles for emergency rooms and specialists, but the kicker was the co-insurance clause. What this clause does is identifies what portion of a bill the insurance will cover. In the case of this plan, the clause split the coverage 60% to the insurer and 40% to the insured for a hospital stay. So if you end up in the hospital with a $100k bill for something not so major, your responsibility will be $10,000 for the deductible and $40,000 for the co-insurance. Had I not read the details and understood the term “co-insurance” I would not have given the coverage differences a second thought since the deductibles were within a few hundred dollars of each other.
Dental coverage is a total joke on the buyers. The policies have waiting periods of 6 to 12 months, coverage caps of $1,000 to $2,000 annually and deductibles everywhere. The premiums are not cheap and if you do the math make you more inclined to write coverage than buy it. One of the better offerings I found had a monthly premium of $72 for my wife and I. The annual maximum benefit was $1,000 per person and the first year coverage on all but checkups and X-rays was 60%. So we would pay $864 in premiums annually to get no more than $2,000 in coverage. With the deductibles, we would need to spend $3,333 in dental work excluding caps, root canals and anything else that’s really expensive to get the $2,000 covered. The expensive stuff is not covered in the first year and the coverage is very limited after that. You need to be an accountant to dig into the coverage and understand all the limitations.
For dental, I decided that an HMO solution was the best approach. I found a well rated dentist that took the program and will save $640 in annual premiums. The preventative care coverage is about the same and the other coverage is well documented. It’s unlikely that I will spend the premium savings on dental work, but even if I did, I’d still be well ahead.
Having set up benefits programs for companies with over 3,000 employees, I found this experience very disturbing. The breadth of options and gaps in coverage built into the various plans is appalling. Given the target customer for these programs is the less well off in society, it’s even more disturbing that the options are so complex and so poor. To be fair, I am sure that the mandates in the law have created many of the problems that I have seen, but as a country, we can do better.
If you are in a similar situation, look at the details of the plans that you are interested in and make sure that you understand the gaps in coverage.