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Health plan sticker shock ahead for some buyers

By Carla K. Johnson

Associated Press

LAST UPDATED: 06:58 a.m. HST, Dec 22, 2013

CHICAGO >> As a key enrollment deadline hits Monday, many people without health insurance have been sizing up policies on the new government health care marketplace and making what seems like a logical choice: They're picking the cheapest one.

Increasingly, experts in health insurance are becoming concerned that many of these first-time buyers will be in for a shock when they get medical care next year and discover they're on the hook for most of the initial cost.

The prospect of sticker shock after Jan. 1, when those who sign up for policies now can begin getting coverage, is seen as a looming problem for a new national system that has been plagued by trouble since the new marketplaces went online in the states in October.

For those without insurance -- about 15 percent of the population-- "the lesson is it's important to understand the total cost of ownership of a plan," said Matt Eyles, a vice president of Avalere Health, a market analysis firm. "You just don't want to look only at the premium."

Counselors who have been helping people choose policies say many are focused only on the upfront cost, not what the insurance companies agree to pay.

"I am so deeply clueless about all of this," acknowledged one new buyer, Adrienne Matzen, 29, an actor in Chicago who's mostly been without insurance since she turned 21. Though she needs regular care for asthma and a thyroid condition, she says she's looking for a low monthly premium because she makes less than $20,000 a year.

Hospitals are worried that those who rack up uncovered medical bills next year won't be able to pay them, perpetuating one of the problems the new health care system is supposed to solve.

The new federal and state health insurance exchanges offer policies ranked as bronze, silver, gold and platinum. The bronze options have the lowest monthly premiums but high deductibles -- the amount the policyholder must pay before the insurer picks up any of the cost of medical care.

On average, a bronze plan's deductible is more than $4,300, according to an analysis of marketplace plans in 19 states by Avalere Health. A consumer who upgrades to a silver plan could reduce the deductible to about $2,500. A top-of-the-line platinum plan has the lowest average deductible: $167.

Comprehensive data on premiums isn't available, but in one example, a 30-year-old in Chicago would pay an average of $222 per month for a bronze plan, $279 for a silver or $338 for a platinum.

The complexities of insurance are eye-glazing even for those who have it. Only 14 percent of American adults with insurance understand deductibles, according to one recent study.

The danger of a wrong snap judgment is great for those under financial pressure -- especially those with modest incomes who make too much to qualify for the government subsidies available under the new health care system. Subsidies aren't available for individuals making more than $45,960.

Most of the uninsured make less than that, but many still pick the cheapest plans.

"Price rules," said John Foley, a Legal Aid counselor in Palm Beach, Fla., who has been helping people enroll.

Some applicants see the catch.

"The real big surprise was how much out-of-pocket would be required for our family," said David Winebrenner, 46, a financial adviser in Lebanon, Ky., whose deductible topped $12,000 for a family of six for a silver plan he was considering. The monthly premium: $1,400.

While the health law makes many preventive services free -- such as vaccines, blood pressure screening and mammograms -- most medical care is paid out of pocket until the deductible level is reached. Some of the new plans offer limited coverage for certain services before a patient has met the annual deductible. These services can include primary care, some prescription drugs and routine care for common chronic conditions such as high blood pressure and diabetes.

It's unclear how many plans provide this feature, and it may not be easy for consumers to tell.

Lynn Quincy of Consumers Union, a public policy group, suggests that consumers narrow their options to five plans, then go to each insurer's website to read the benefits summary. It spells out who pays what for two common situations: having a baby and managing Type 2 diabetes.

To be sure, the new health law did away with the whopping deductibles in plans previously offered to people without employer-provided coverage. Out-of-pocket costs are now capped at $6,350 for individuals and $12,700 for a family.

But some people who have been paying their own medical bills, or leaving them unpaid at the hospital, seem surprised that health insurance doesn't cover more of the costs.

"They previously had no insurance coverage at all and so they might not be happy," said Cynthia Rahming, an enrollment counselor in Houston.

Fearing the sticker shock, Loyola University Health System in Chicago is offering payment plans to spread the out-of-pocket costs.

Some who had private insurance policies that were canceled may find that keeping the same deductibles may mean higher premiums.

In California, Diane Agnone complained in an online post on her state's health marketplace. "How is this affordable? I am a healthy 62-year-old single woman and these new premiums will cost me over $200 more per month than my existing plan."

The new insurance system requires policies to cover more services than some consumers had chosen to buy in the past.

"It's all a matter of having a budget and it only goes so far," said Agnone, an executive with a nonprofit charity based in Fairfield, which is about halfway between San Francisco and Sacramento. "There is no winning in this."


Associated Press writers Michael Blood in Los Angeles, Ramit Plushnick-Masti in Houston, Kelli Kennedy in Fort Lauderdale, Fla., and Roger Alford in Frankfort, Ky., contributed to this report.

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eoe wrote:
So where have these outraged stories been as our premiums have steadily increased for the last 15 years? People pretend like this is something new. 2000: 11%; 2001: 10%; 2002: 13%; 2003: 13%; 2004: 10%.
on December 22,2013 | 07:25AM
Pacej001 wrote:
" In the average state, Obamacare will increase underlying premiums by 41 percent. " Forbes (and many other sources). Not only with the premiums increase, but skyrocketing deductibles. Do I need to walk you through the comparison game? 42% vs 13%?

Which leads to age old question: How/why did progressives/liberals become reality proof?

on December 22,2013 | 07:43AM
serious wrote:
It is easy to pass a bill when your own health is covered by a different, more elegant, and subsidized policy. If the politicians were in the ditches with the "regular" people they would be still working on it rather than passing it to see what's in it. This Reid/Pelosi scheme is worse than the Dodd/Frank financial mess. And, what's worse is this You can keep your old policy and your old doctor, was known to be false by the Administration but they didn't say anything because it might hurt Obama's reelection---anybody recall the lies in the Carter years???
on December 22,2013 | 08:05AM
Meleana22 wrote:
@Pacejj001 Yes, you do need to spell it out or draw a picture for some stubborn, ignorant fools that refuse to accept the hard facts that Obamacare costs will be a burden for many. The freebie folks will benefit but others will have to make up the difference with higher premiums. There may very well be free lunch for some but certainly not for the majority. Due to higher premiums, many younger, healthy people will simply stay uninsured for as long as they can and this will compromise the entire premise of Obamacare. Congratulations to those smart enough to understand why this is so.
on December 22,2013 | 12:03PM
eoe wrote:
Interesting, the number I read was 1.5%. Probably I am just an indoctrinated sheep.
on December 22,2013 | 12:31PM
Meleana22 wrote:
@ eoe Please reveal your source? 1,5%? Only in your dreams...
on December 22,2013 | 02:25PM
Pacej001 wrote:
Well, thank you Star Advertiser for revealing the impact of Obamacare--- that every sentient being in the US has known for at least a month. Better late than never, right? Better, that is, unless your deadline to sign up for this medical train wreck is day after tomorrow (that is the deadline, BTW).
on December 22,2013 | 07:37AM
kuroiwaj wrote:
I'm looking forwards into a few months of 2014 when the federal mandates on business kicks. The sticker shock on the business covering health insurance premiums will impact all citizens that have their medical plans through the employers. Most in Hawaii have family plans and business will have to make hard decisions, including any under collective bargaining agreements. More hits on the middle class coming.
on December 22,2013 | 09:06AM
cojef wrote:
Just thinking about it is scary listening to what is happening to those individuals who are not currently covered by employer plans. Am a retiree and my policy jumped more than the usual annual increases. Come October will probably find out that it has skyrocketed. The 2014 coverage includes transgender coverage and may be the reason for the jump in the premiums. Never had that coverage for over 20 years, it is mandated by ACA even though at age 88 will not require such coverage. Go figure! Got to have the coverage to protect the really small percent of the population that has the that problem of being born with the wrong sex organ.
on December 22,2013 | 12:32PM
SteveToo wrote:
But Uncle Barry said it would be so much better. NOTHING IS FOR FREE! Someone always has to pay the piper.
on December 22,2013 | 07:38AM
aomohoa wrote:
Unfortunately, its always the middle class.
on December 22,2013 | 08:23AM
kekelaward wrote:
It isn't just the premiums, it's the deductibles and other out of pocket expenses. You haven't even started to hear the anger and gnashing of teeth...wait until the employer mandate kicks in, and millions more people lose the policies that they like and can afford. Don't expect the young to be stupid enough to bankrupt their futures for the democrat's political gain.
on December 22,2013 | 07:44AM
Pacej001 wrote:
You're right. Next year we're going to see one huge political ----storm.
on December 22,2013 | 08:04AM
hawaiikone wrote:
Is it just a coincidence that those mandates don't take effect until after the 2014 elections? Barry has delayed implementation of a wide variety of laws and regulations for political gain far more than any other president.
on December 22,2013 | 09:09AM
frontman wrote:
the LIAR of the year is in the sun while he punishes a nation.
on December 22,2013 | 08:40AM
aomohoa wrote:
"Punishes a nation." That's a bit harsh.I think this is what he wanted to be remembered in history for accomplishing. I think he got caught up in a time line and had no clue what he was doing and would not listen to advisers. I don't think he wanted to hurt people I just think he's not competent.
on December 22,2013 | 01:53PM
Anonymous wrote:
This is just like the sub-prime mortgage rates that got us into the economic crash of 2008!
on December 22,2013 | 09:13AM
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