I’m still muddling through decision-making around health insurance for our family. In addition to giving me increased solidarity with the typical ACA consumer now faced with buying their own insurance, this experience has amplified for me some of the things we have been talking about needing to fix in healthcare for some time now.
My latest adventure began with choosing our new health plan for the upcoming year through COBRA. This year, we have a choice between just two plans – a more traditional PPO and a high-deductible health plan (HDHP) in which we must meet the deductible before any insurance kicks in. Only two plans… easy, right? Not so fast.
For one thing, this happens to be a paper-enrollment process, since we are on COBRA, and I don’t have access to any cost-estimating tools to help me compare plans. That’s okay – I am reasonably good with complex math. Being a fairly analytical person, I actually am comfortable estimating our out-of-pocket costs since I can make an educated guess as to our family’s expected use of healthcare services this year.
It is fairly straightforward to estimate our out-of-pocket costs under the traditional PPO plan, since the services we tend to use most are all covered by copays. My estimated costs for the year thus equal Premium + Copay X # Services. Awesome…I’m cruising along on this task!
Things grind to a halt, however, when I turn to the HDHP, where we would need to pay our deductible before any insurance coverage kicks in. While I can still estimate the services we will need, what in the world do I use for costs?! I’m not completely stalled, however, as I realize I can go to my insurer’s website and download our claims history for the year. Among the data provided, I can calculate the negotiated rate for the services we received (doctor visits, etc.). Setting aside the fact that I have been able to gain no insight into the prescription drug costs, since that is under a separate PBM and seemingly unobtainable, I am able to get some sense of what our out-of-pocket costs might look like under the HDHP.
What I’m left with is a revelation – which is not really a revelation – that consumers need cost transparency not only to make smart choices at the time of needing healthcare services, but also upfront when deciding on health coverage. Even with a solid cost-estimating tool, many consumers will still struggle with choosing a plan where you have no idea whether an office visit could cost $100 or $500. I strongly suspect that, unless forced due to budget constraints, consumers will continue to have inertia around changing health plans and will not readily adopt HDHPs until they have more insight into what things cost.
This lack of cost transparency has left me feeling less than confident in my choice – and I was choosing between just two plans! You can only imagine what happens when consumers compare many more plans. And, how many consumers will take the time – or even know how – to download their past claims history to do their own estimating?
I know there are significant complexities and concerns around making more cost data available from insurers and providers, but this really is something the industry needs to tackle if we are going to enable consumers to take more responsibility for their health and financial security.