Don’t wait ’til last minute to enroll in Obamacare

Introduction

Attention shoppers: After today, for those whose employers don’t offer health insurance, there will only be seven shopping days left for coverage that starts on January 1, 2015.

December 15 is the last day you will be able to pick an Obamacare plan if you want to be insured beginning New Year’s Day. If you’re like most folks, you’ll wait until close to the deadline to make a choice.

Don’t be like most folks.

If you don’t give yourself enough time to sort through the options available to you, you might wind up paying your insurance company a lot more than necessary — which is exactly what a lot of my former colleagues in the business are hoping for.

Insurance company executives have spent millions of dollars persuading us — and the people we vote for — that what we crave is more “choice and competition.” They even bankrolled a group called the Choice and Competition Coalition, which is little more than a public relations and lobbying outfit designed to protect the profitable status quo for health insurers. They do so by making sure certain members of Congress don’t even think about giving us the choice and competition that would really make difference.

That would be the choice of a government-run “public option” to compete with private insurance companies. Insurers spent millions of dollars on lobbying and campaign contributions in a successful effort to strip the public option from the bill that became the Affordable Care Act.

In my 20 years in the insurance industry, I never met anyone who said they were looking forward to picking a health plan. There’s a good reason for that. Trying to figure out what’s best for yourself and your family can be bewildering. Even with my background in the insurance world, I would rather have a root canal than sit in front of a computer for hours trying to determine which plan offers the best value.

Industry statistics show that once people make a decision, they’ll stay with the same plan for years, even if there are other plans available to them that would cost less and provide better coverage. Why? We don’t enjoy the process because we’re not educated consumers of insurance. We don’t really know what we’re doing or what we’re buying. Polls have shown that large percentages of Americans don’t even have a grasp of basic insurance terms and concepts.

That was borne out by a study released in October by The Robert Wood Johnson Foundation and the Kaiser Family Foundation. The researchers described insurance literacy barriers as “huge” for most Americans.

Of the millions of people who enrolled in Obamacare plans last year, “many…didn’t understand basic concepts like how a deductible works or why premiums must be paid every month,” the researchers wrote. “Many consumers also had trouble understanding (Affordable Care Act) premium and cost sharing subsidies.”

Knowing this, the Obama administration last week pleaded with folks who will be returning to the marketplace this year to shop around. Chances are good they can save money and get better coverage if they do.

Last year, some insurers offered policies with relatively low premiums to attract customers in a practice known in the industry as “buying market share.” This year, those insurers are hitting their customers with hefty rate increases. An example is Blue Cross Blue Shield of Tennessee, which grabbed 88 percent of the Obamacare market in the Volunteer State with rates considerably lower than its competitors.

Hardly more than six months into the year, the insurer filed documents with state regulators saying it planned to raise rates by an average of 19 percent for its exchange plans for 2015. The insurer couldn’t possible have had enough claims data by July to know for sure that it would need to jack rates up that much, but it wanted to be certain its Obamacare business would be profitable next year.

Even with that kind of an increase, chances are great that the insurer’s Obamacare members will simply renew their coverage without shopping for a better deal with another company.

The Obama Administration said in a report last week that more than 70 percent of people who bought coverage on their state exchanges last year can find a health plan for 2015 that offers the same level of coverage at a lower premium and that 80 percent could find a plan with monthly premiums lower than $100 after subsidies are factored in.

While that sounds like great news, shoppers beware. Plans with the lowest premiums often provide inadequate coverage for a lot of people, especially those who have to take expensive medications and go to the doctor frequently. The bronze plans have considerably lower premiums than the gold and silver plans, but the deductibles are typically much higher.

For 2015, the average deductible for a bronze plan for an individual will be almost $5,200. That means that you’d have to spend that much money out of your own pocket before your insurance coverage kicks in.

One of my biggest complaints about Obamacare, aside from the fact that insurers killed the public option that was once a part of the bill, is that it forces us to gamble with our health and our finances. And most of us are just not insurance literate enough to make the best choices.

Wendell Potter is the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans and Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act.