InfoStat | 01-22-14

Consumers Risk Higher Healthcare Costs When Using Shortcuts in Health Plan Shopping

HealthPocket’s recent study, “Deductibles, Out-of-Pocket Costs, and the Affordable Care Act,” illuminated the considerable differences in average deductibles and out-of-pocket spending caps among the new Affordable Care Act health plans (bronze, silver, gold, platinum). Inasmuch as the study focused on averages, it did not examine the range of cost sharing among plans within each individual health plan category. These ranges, however, are extremely relevant to consumers shopping for health plans.

In order to demonstrate how much variance there is in cost-sharing within each health plan type, HealthPocket examined the lowest to highest deductibles as well as medical out-of-pocket caps for the new individual & family marketplace metal plans in 34 states. For three of the four health plan categories (bronze, silver, and gold) HealthPocket saw deductible ranges spanning thousands of dollars for insurance policies belonging to the same category of health plan. The largest range was within silver plans where the lowest deductible recorded was $0 and the highest was $6,250. The smallest range was among platinum plans where the lowest deductible was $0 and the highest was $1,000.

Cost-sharing for individual metal plans in individual/family marketplace

When looking at only the average1 deductibles in the individual & family marketplace, the low premium bronze plans had the highest expense. However, given the range of deductibles among bronze plans it was possible that one bronze plan could have a lower deductible amount than other silver and gold plans available in the same area. For example in Oklahoma County, Oklahoma, GlobalHealth sold a bronze plan under the name GlobalHealth, Inc. with a deductible of $2,000 and Blue Cross Blue Shield of Oklahoma sold a gold plan called Blue Choice Gold PPO 001 with a deductible of $3,250. However the GlobalHealth, Inc. bronze plan had a $6,300 cap on annual out-of-pocket medical costs and copayments after deductible of $50 for primary care visits and $125 for specialist visits. The Blue Choice Gold PPO 001 plan had a $3,250 cap on annual out-of-pocket medical costs and copayments of $30 for primary care visits and $50 for specialist visits.

Caps on Out-of-Pocket Costs

HealthPocket found a situation with out-of-pocket cost caps similar to what was found for deductibles. For example, there was the possibility that a top-tier platinum plan could have a higher cap in some cases than an entry-level bronze plan. In Jefferson, Louisiana, AAA Vantage Health Plan sold both a bronze plan called AAA014 Vantage Individual Marketplace Bronze with a cap of $4,350 and a platinum plan called AAA011 Vantage Individual Marketplace Platinum with a cap of $5,850. The AAA014 Vantage Individual Marketplace Bronze plan had a $4,350 deductible and copayments of $60 and $90. The AAA011 Vantage Individual Marketplace Platinum plan had a $0 deductible and copayments of $10 for primary care visits and $40 for specialist visits.

Both gold health plans and platinum health plans had the widest range of out-of-pocket caps ($4,850 difference from the lowest cap amount to the highest cap amount).

Small Group Health Insurance Plans

When examining metal plans in the small business health insurance market, HealthPocket found results similar to what was found for the individual/family insurance market. The bronze, silver, and gold tiers had deductible ranges spanning thousands of dollars. Silver plans had the largest deductible range with a low of $0 and a high of $6,000, while platinum plans had the smallest deductible range with a low of $0 and a high of $1,500. Bronze plans had the smallest range of caps on annual out-of-pocket medical costs with a low of $4,350 and a high of $6,350. Every metal tier had some plans with $6,350 caps.

Cost-sharing for individual metal plans in the small business marketplace

In the small business marketplace it was possible to find a bronze plan with a lower deductible than some silver or gold plans in the same county. For example in Cook County, Illinois, Land of Lincoln Mutual Health Insurance Co. sold a bronze plan called Land of Lincoln National Freedom PPO Plan with a deductible of $1,750, while Blue Cross Blue Shield of Illinois sold a gold plan called Blue PPO Gold 001 with a deductible of $3,250. The Land of Lincoln National Freedom PPO bronze plan had a $6,250 cap on annual out-of-pocket medical costs and coinsurance fees of 60% after deductible for both primary care and specialist visits, while the Blue PPO Gold 001 plan had a $3,250 cap on annual out-of-pocket medical costs and copayments of $30 for primary care visits and $50 for specialist visits.

With small business plans it was also possible to find a platinum plan with a higher cap on annual out-of-pocket medical costs than a bronze plan in the same county. For example in Jefferson County, Louisiana, AAA Vantage Health Plan sold both a bronze plan called AAA014 Vantage Group Marketplace Bronze with a cap of $4,350 and a platinum plan called AAA011 Vantage Group Marketplace Platinum with a cap of $5,850. The AAA014 Vantage Group Marketplace Bronze plan had a $4,350 deductible and copayments of $60 for primary care visits and $90 for specialist visits, whereas the AAA011 Vantage Group Marketplace Platinum plan had a $0 deductible and copayments of $10 for primary care visits and $40 for specialist visits.

Conclusion

The late Boston politician Tip O’Neill once said, “All politics is local.” The same might be said of health plans. National averages on deductibles and out-of-pocket caps can be misleading if used for local health insurance plan shopping. Consumers are advised to examine their local health plan options carefully, judging cost-sharing individually rather than based on a plan’s particular metal tier category. Failure to follow this advice could result in some unpleasant surprises with respect to deductibles and out-of-pocket expense limits.

METHODOLOGY

Out-of-pocket costs for 2014 Affordable Care Act individual & family health plans were based on the Qualified Health Plan (QHP) Landscape files for 34 federally-facilitated marketplaces, state-partnership marketplaces, and state-based marketplaces using the federal application system. Out-of-pocket costs for 2014 Affordable Care Act small business health plans were based on the Qualified Health Plan (QHP) Landscape files for 32 marketplaces.

Bronze, silver, gold, and platinum health plan data was used, covering multiple rating regions within the states covered by the landscape files. Plans that lacked cost-sharing data were not included within the study. Catastrophic plans and dental plans were not included within the scope of this study. The Qualified Health Plan (QHP) Landscape files were downloaded by HealthPocket from the Centers for Medicare & Medicaid Services on January 1, 2014.

All plans investigated in this study belong to the individual & family market or the small business market. Medicare, Medicaid, and short-term health insurance plans were not analyzed as part of this study.

Industry standard rounding methods were utilized.

No weighting by health plan enrollment was performed.

AUTHORS

This analysis was written by Jesse Geneson, data researcher at HealthPocket, and Kev Coleman, Head of Research & Data at HealthPocket. Correspondence regarding this study can be directed to Mr. Coleman at kevin.coleman@healthpocket.com.

Feedback and questions are welcome but, given the volume of email, personal responses may not be feasible.

Jesse Geneson on Google+
Kev Coleman on Google+

Sources

1 The average deductibles and caps on annual out-of-pocket medical costs for each metal plan are from Qualified Health Plan (QHP) Landscape files downloaded on January 1, 2014. The QHP Landscape file for the individual & family marketplace was last updated December 19, 2013, so the averages in this InfoStat are slightly different from the averages from the QHP file downloaded December 1, 2013 which are in the InfoStat “Deductibles, Out-of-Pocket Costs, and the Affordable Care Act,”

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