Bruce Japsen, Forbes
Though the Obama administration touted lower-than-expected premiums for individuals that will begin Tuesday taking to exchanges to shop for health benefits, consumers will also see high out-of-pocket expenses, a parade of states and study of those costs show.
As has been the case for years for individuals or small groups who buy state-regulated insurance, they often can get lower premiums, but have a trade-off in the former of higher deductibles, co-payments and other cost-sharing. This will be common for individuals who beginning Tuesday, will be examining the myriad plans available to them under the Affordable Care Act. The open enrollment, the period when they can select benefits, runs Tuesday, Oct. 1 through March of next year.
“Consumers will need to balance lower monthly premiums against the potential for unpredictable, expensive out-of-pocket costs in plans with higher deductibles,” said Caroline Pearson PSO +0.79%, vice president of Avalere Health, a research and advisory services firm on health policy issues tracking the Affordable Care Act.
Avalere last week issued a report on out-of-pocket costs consumers will face before they hit their so-called “out-of-pocket cap.” The report was based on health plan designs in Colorado, Connecticut, Indiana, Rhode Island, Vermont and Washington. More states are expected to unveil their costs and premiums this week.
U.S. Secretary of Human Services Kathleen Sebelius last week said the average premium nationally for the “second lowest cost” silver plan will be $328 before tax credits. That, the administration said, will be 16 percent below projections made earlier from Congressional Budget Office estimates.
But the Avalere report said its research shows the average annual deductible for someone who enrolls in a Silver plan will be “more than twice the average deductible in employer-sponsored coverage.” This comes as most exchange plans rely on the consumer picking up 40 percent of the drug costs.
Average deductibles can range from a low of $1,500 to a high of $5,000, according to the Avalere analysis.
The number of choices – which will include at least two plans in each state – means consumers should examine their out-of-pocket costs and needs carefully, the Obama administration as well as benefits consultants’ advice. If they don’t, they could “forego needed care,” Avalere analysts say.
Most major health insurance companies are participating in various states across the country including Blue Cross and Blue Shield plans, Aetna AET -0.46% (AET), Humana (HUM) and UnitedHealth Group (UNH).
“It will be very important for consumers to be smart shoppers. Plans that use benefit designs with flat dollar copays rather than coinsurance could significantly reduce out-of-pocket costs for patients who regularly take prescription drugs,” said Matt Eyles, Avalere Health’s executive vice president. “Patients need to understand how different health plans will cover the services and medicines that they use most often to determine which plan is best for them or their families.”
Consumers can get information through www.healthcare.gov or by calling 1-800-318-2596. The Henry J. Kaiser Family Foundation also has a premium assistance subsidy calculator linked here for those seeking assistance in shopping.
Though the Obama administration touted lower-than-expected premiums for individuals that will begin Tuesday taking to exchanges to shop for health benefits, consumers will also see high out-of-pocket expenses, a parade of states and study of those costs show.
As has been the case for years for individuals or small groups who buy state-regulated insurance, they often can get lower premiums, but have a trade-off in the former of higher deductibles, co-payments and other cost-sharing. This will be common for individuals who beginning Tuesday, will be examining the myriad plans available to them under the Affordable Care Act. The open enrollment, the period when they can select benefits, runs Tuesday, Oct. 1 through March of next year.
“Consumers will need to balance lower monthly premiums against the potential for unpredictable, expensive out-of-pocket costs in plans with higher deductibles,” said Caroline Pearson PSO +0.79%, vice president of Avalere Health, a research and advisory services firm on health policy issues tracking the Affordable Care Act.
Avalere last week issued a report on out-of-pocket costs consumers will face before they hit their so-called “out-of-pocket cap.” The report was based on health plan designs in Colorado, Connecticut, Indiana, Rhode Island, Vermont and Washington. More states are expected to unveil their costs and premiums this week.
U.S. Secretary of Human Services Kathleen Sebelius last week said the average premium nationally for the “second lowest cost” silver plan will be $328 before tax credits. That, the administration said, will be 16 percent below projections made earlier from Congressional Budget Office estimates.
But the Avalere report said its research shows the average annual deductible for someone who enrolls in a Silver plan will be “more than twice the average deductible in employer-sponsored coverage.” This comes as most exchange plans rely on the consumer picking up 40 percent of the drug costs.
Average deductibles can range from a low of $1,500 to a high of $5,000, according to the Avalere analysis.
The number of choices – which will include at least two plans in each state – means consumers should examine their out-of-pocket costs and needs carefully, the Obama administration as well as benefits consultants’ advice. If they don’t, they could “forego needed care,” Avalere analysts say.
Most major health insurance companies are participating in various states across the country including Blue Cross and Blue Shield plans, Aetna AET -0.46% (AET), Humana (HUM) and UnitedHealth Group (UNH).
“It will be very important for consumers to be smart shoppers. Plans that use benefit designs with flat dollar copays rather than coinsurance could significantly reduce out-of-pocket costs for patients who regularly take prescription drugs,” said Matt Eyles, Avalere Health’s executive vice president. “Patients need to understand how different health plans will cover the services and medicines that they use most often to determine which plan is best for them or their families.”
Consumers can get information through www.healthcare.gov or by calling 1-800-318-2596. The Henry J. Kaiser Family Foundation also has a premium assistance subsidy calculator linked here for those seeking assistance in shopping.
