Obamacare subscribers: Beware of high deductibles

Introduction

House Minority Leader Nancy Pelosi last Thursday rejected the notion that Democrat Alex Sink’s narrow loss to Republican David Jolly in last week’s special election in Florida — in a congressional district that Republicans have held for half a century — was a referendum on Obamacare.

“I’m very proud of our House Democrats, not only how they’ve embraced the Affordable Care Act … but how proud they are of it,” Pelosi said. “I think the Republicans are wasting their time using that as their election issue and they will find that out.”

Pelosi went on to say, however, that, “there are some things (about the law) that need to be fixed.”

She didn’t suggest what those things are, but I’m betting at the very least she wishes she and others who helped write the law had made it simpler for people to get the insurance protection they need.

The reform law made many of the insurance industry’s most despised practices illegal, like refusing to offer coverage to applicants with pre-existing conditions and canceling people’s policies when they get sick.

And the ACA now requires insurers to provide information about their policies in understandable language and in a format that enables people to compare one plan with another. It also established federal and state health insurance “exchanges” to make shopping for coverage more convenient and less stressful.

But despite those and other important benefits of the law, trying to figure out which health plan among many is best for you is anything but a walk in the park.

With only two weeks left before the March 31 deadline to enroll in a plan for 2014, I talked to Rachel DeGolia — one of the specially trained ACA navigators who is helping folks in Cleveland, Ohio, figure out how to move out of the ranks of the uninsured — to find out how she would fix the law if she had the power to do so.

I also consulted the 114-page “Navigator Resource Guide” developed by the Center on Health Insurance Reforms at Georgetown University Health Policy Institute to help navigators like DeGolia deal with all the questions they get every day from folks.

Although DeGolia still believes a single-payer system would be better than the multi-payer system the ACA is built upon, she nevertheless considers the law “a huge step in the right direction.”

But, she says, lawmakers need to figure out how to make coverage more affordable and to reduce the complexity that has defined the health insurance industry for decades.

“Coverage is not as affordable as many people need it to be yet,” she says.

In the 25 states that have expanded their Medicaid programs to include residents with incomes up to 138 percent of the federal poverty level, the people at the lower end of the income spectrum are in many cases better served by the law than middle income individuals and families.

“If you make $30,000 and can find an affordable premium but still have a $5,000 deductible, that’s not a great deal if you get sick,” she said.

“It doesn’t make sense to me why we have to have these high deductibles,” she added. “Maybe they exist because people need to have ‘skin in the game,’ but I haven’t met people who overuse services. That’s not the norm. I’m afraid the deductibles will be so high for some people that it will deter them from getting the care they need, even if they are insured.”

And because plans with the highest deductibles have the lowest premiums, she says she worries that people will “settle” for a plan that provides less comprehensive coverage than then they really need.

Another problem with the health plans being offered on the exchanges is that many of them have “narrow” provider networks, meaning that a person’s doctor might not be included.

“It’s a challenge is to help people who have never had insurance to explain it to them,” said DeGolia. “You can easily spend two hours with them. It’s a big learning curve.”

DeGolia also wishes the ACA didn’t limit enrollment to just a few months a year — which brings me to that Georgetown Navigator Resource Guide. Here’s Question 37 (of 270):

“Why can’t I buy a plan when I need it? Why do I have to wait for the open enrollment period?

Answer: If everyone were allowed to wait until they were sick to buy coverage, premiums would be very expensive … Health insurers need a mix of healthy and sick people to make premiums fair for everyone.”

(Of course, if everyone were covered and automatically enrolled in a single-payer system as in other countries, there wouldn’t be a need for open enrollment. Our health care system is complex in large part because we have so many payers.)

Click here to find the answers to the other 269 questions in the resource guide. And for more information about how the reform law affects you, check out my eBook: Obamacare: What’s in It for Me? What Everyone Needs to Know about the Affordable Care Act.