Consumers on healthcare.gov are not too happy with the options they find on the health exchanges. After 2 months the federal health site is working reasonably well but shoppers have two complaints. One is that the co-payments and deductibles are high on the plans offered – this is money paid by the insured before the plan can commence. The second is that the choice of hospitals and doctors is very limited. Under Obamacare the choice is limited and at the same time out-of-pocket-expenses pretty high. The plans sold on the exchange must comply with the list of essential benefits, while not charging sick patients too much. The insurer has to set an actuarial value – the insurer will cover 60% and the patient covers the rest.
The plans under Obama care are classified as bronze - 60% is covered, silver – 70% is covered, gold – 89% is covered and in platinum 90% is covered. These categories make it easier to compare plans but make it difficult for the insurer to differentiate their products. A limited network of doctors is cost effective though not always popular; almost 60% of the plans have managed care which is very effective at curbing prices. Managed care is a technique used by health maintenance organizations (HMO’s) so far used for the elderly and for Medicare Advantage a program for the elderly and may catch on with the young customers too.
High deductibles have an advantage, as it will get the young and healthy to sign up on low premiums and a few of them on the off chance of injuries or ill health will have to pay - maybe a high deductible. The drawbacks are that the sick and poor individuals with chronic ailments will need to pay out thousands of dollars. The Democrats will need to rethink the rules in Obamacare and customers have just a few days left to make their choices.
Hannah Punitha (IRDA Licence Number: 2710062)
The Economist, December 2013