meganjhonson: Insurance exchanges: Buyers must be diligent

Sunday, November 18, 2012

Insurance exchanges: Buyers must be diligent | TribLIVE

By Luis F?bregas

Published: Saturday, November 17, 2012, 12:01?a.m.
Updated 15 hours ago

The president?s re-election has halted the chatter about repealing Obamacare. The talk has suddenly shifted to putting the health care law into action.

The law?s key parts roll out in 2014, including the requirement that most Americans carry health insurance and the creation of online insurance malls ? so-called ?exchanges? ? where individuals and small businesses can shop for health plans.

Republican governors in several states, including Ohio, Wisconsin and Texas, have objected to the insurance exchanges, which have been compared to websites such as Expedia, the one-stop shop where travelers compare prices for airline tickets and hunt for bargains. In Pennsylvania, the insurance commissioner appears to be in no hurry to make a decision. The state has until Dec. 14 to tell the Department of Health and Human Services what it intends to do.

I am no psychic, but I?m willing to bet the state will choose not to run the exchange. Look for it as a symbolic stand against Obama by Republican Gov. Tom Corbett, who, in doing so, will put the Keystone state?s exchange in the hands of the federal government.

If that?s the case, does anyone really believe the feds can do a better job than locals who understand Pennsylvania?s unique population and needs? Why not come up with a creative way to offset the cost of the exchange, such as a fee to the insurance companies, as some groups have suggested?

Insurance exchanges, despite their ill-advised name, aren?t necessarily a bad prescription. They offer not only choice but the transparency of a price tag, a feature not always afforded to health-care consumers.

They come with bipartisan support and were a critical piece of the Massachusetts law championed by former GOP presidential contender Mitt Romney.

Choosing an insurance plan has never been easy. And selecting one solely based on price is not the same as selecting a flight to New York City on JetBlue versus USAirways. The insurance jargon and plain gibberish that insurers manage to slap on most documents can be exhausting.

The trickiest issue facing the people creating exchanges is distilling the information so that consumers can make smart decisions. Researchers at the University of Pennsylvania found that the average buyer on the Massachusetts health insurance exchange spent less than 20 minutes selecting and purchasing a policy. Sixty percent of shoppers picked a plan from the lowest-priced policy tier. That might work for people who are healthy, but if you have a chronic condition and regularly take medications, you might end up paying more in out-of-pocket costs.

The implication for Pennsylvania, and the rest of the country, is that the rollout of these online stores will be confusing at best. To be successful, the exchanges must ensure users understand what are often complicated plans.

The law calls for the exchanges to start enrolling people by next October. As the clock ticks, one big question remains to be answered: Will the exchanges be able to contain costs? Or will they wind up costing us more?

Luis Fabregas is a staff writer for Trib Total Media. He can be reached at lfabregas@tribweb.com.