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For months, the Obama administration has heralded the low premiums of medical insurance policies on sale in the insurance exchanges created by the new health law. But as consumers dig into the details, they are finding that the deductibles and other out-of-pocket costs are often much higher than what is typical in employer-sponsored health plans.
Until now, it was almost impossible for people using the federal health care website to see the deductible amounts, which consumers pay before coverage kicks in. But federal officials finally relented last week and added a “window shopping” feature that displays data on deductibles.
For policies offered in the federal exchange, as in many states, the annual deductible often tops $5,000 for an individual and $10,000 for a couple.
Insurers devised the new policies on the assumption that consumers would pick a plan based mainly on price, as reflected in the premium. But insurance plans with lower premiums generally have higher deductibles.
In El Paso, Tex., for example, for a husband and wife both age 35, one of the cheapest plans on the federal exchange, offered by Blue Cross and Blue Shield, has a premium less than $300 a month, but the annual deductible is more than $12,000. For a 45-year-old couple seeking insurance on the federal exchange in Saginaw, Mich., a policy with a premium of $515 a month has a deductible of $10,000.
In Santa Cruz, Calif., where the exchange is run by the state, Robert Aaron, a self-employed 56-year-old engineer, said he was looking for a low-cost plan. The best one he could find had a premium of $488 a month. But the annual deductible was $5,000, and that, he said, “sounds really high.”
By contrast, according to the Kaiser Family Foundation, the average deductible in employer-sponsored health plans is $1,135.
Americans who are buying insurance plans over online exchanges, under what is known as Obamacare, will have limited access to some of the nation’s leading hospitals, including two world-renowned cancer centres.
Amid a drive by insurers to limit costs, the majority of insurance plans being sold on the new healthcare exchanges in New York, Texas, and California, for example, will not offer patients’ access to Memorial Sloan Kettering in Manhattan or MD Anderson Cancer Center in Houston, two top cancer centres, or Cedars-Sinai in Los Angeles, one of the top research and teaching hospitals in the country.
Experts say the move by insurers to limit consumers’ choices and steer them away from hospitals that are considered too expensive, or even “inefficient”, reflects the new competitive landscape in the insurance industry since the passage of the Affordable Care Act, Barack Obama’s 2010 healthcare law.
It could become another source of political controversy for the Obama administration next year, when the plans take effect. Frustrated consumers could then begin to realise what is not always evident when buying a product as complicated as healthcare insurance: that their new plans do not cover many facilities or doctors “in network”. In other words, the facilities and doctors are not among the list of approved providers in a certain plan.
Under some US health insurance plans, consumers can elect to visit medical facilities that are “out of network”, but they would probably incur high out of pocket costs and may need referrals to prove that such care is medically necessary.
The development is worrying some hospital administrators who see the change as an unintended consequence of the ACA.
“We’re very concerned. [Insurers] know patients that are sick come to places like ours. What this is trying to do is redirect those patients elsewhere, but there is a reason why they come here. These patients need what it is that we are capable of providing,” says Thomas Priselac, president and chief executive officer of Cedars-Sinai Health System in California.
It may have been a debacle, but there is one upside to the glitch-plagued rollout of the health care website: It’s become a powerful case study for crisis management consultants and their clients of what not to do.
In Chicago, H + A International, a communications firm, delivered its customers a 15-point diagnosis of the administration’s handling of the crisis. That led one of its clients to temporarily halt the introduction of a new software product for engineers at a recent trade show of 30,000 people.
In San Francisco, Singer Associates, a public relations company, used the Obama crisis to prevail upon major real estate and environmental remediation clients to beta test their online programs before launching them. Sam Singer, the president, said, “A lot more clients are now asking for an extra set of eyes on things before they roll them out.’’
And in Boston, the CHT group, with clients in industries ranging from health care to electronics, published a guide titled “Obamacare and Health Insurance Exchanges: A PR Makeover’’ with tips large and small – from holding more news conferences to creating an infographic explaining the benefits of the new law — for what the White House should have done to tamp down the fallout.
Far from the world of government and politics, the botched launch of Healthcare.gov has become an instant classic. It has replaced such notorious bungles as New Coke and the BP oil spill as a real time example in the crisis management world of how not to respond when everything goes wrong. Experts are eagerly cashing in on the administration’s missteps, offering critiques in private interactions with clients, as well as publishing blog posts and op-eds on the basic rules of crisis management that were not followed.
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