Let Your Fingers Do the Shopping
Affordable Care Act Expands Choices for Health Insurance
By Sandy Graham
Travelers can compare flight times, prices and connections through websites such as Orbitz or Travelocity.
Geeks can contrast the bells and whistles of the newest digital devices through Shopzilla or PriceGrabber.
And in 2014, Americans will be able to shop online for the health insurance plans that best meet their needs – knowing they cannot be turned down for coverage.
The ability to tap into a state-based, electronic marketplace for affordable, quality health insurance is one of many changes brought about by the Affordable Care Act (ACA) of 2010, the federal health care reform bill. To balance this more open insurance market, the ACA requires the vast majority of Americans to obtain health insurance or face fines.
"The ACA means dramatic changes for people trying to get health coverage," says Sabrina Corlette, JD, a research professor at the Health Policy Institute of Georgetown University in Washington, D.C. "For the first time, they won't be discriminated against if they have pre-existing conditions. Nor can they be charged more for those conditions." (For more about Colorado's exchange, see story, Building Colorado's Health Insurance Exchange.)
But it's a two-way street, Corlette adds. "People are obligated by the ACA to maintain coverage even when they're in good health," she says. "That's really a paradigm shift." Requiring most Americans, sick or well, to carry insurance keeps average costs down for all.
The insurance requirement, known as the "individual mandate," is one of the most controversial elements of this highly controversial law, which has been blasted by critics as a "federal takeover of health care." The U.S. Supreme Court should decide the mandate's constitutionality later this year.
Regardless of the rhetoric and rancor surrounding the ACA, this complex law has – and will have – great impact. (For an overview of the provisions that have gone into effect and those coming through 2018, see Tips.) Ultimately, backers hope the bill will expand access to affordable care, foster more of a "culture of health" among Americans and improve the health care delivery system.
Less Red Tape
In what is perhaps one of its biggest goals, the ACA strives to streamline the convoluted American health insurance system through a standardized format for comparing plan premiums, deductibles, coverage, limits and out-of-pocket costs for common medical procedures, all in plain English. The Summary of Benefits and Coverage tool, developed by the National Association of Insurance Commissioners and a working group, will debut in March.
"Health insurance is one of the most confusing and confounding things we buy – in addition to one of the most expensive," says Karen Pollitz, MPP, a senior fellow at The Henry J. Kaiser Family Foundation. "It's worse than doing taxes. There is definitely value in making it more understandable."
Ultimately, the ACA will extend health insurance coverage to about 30 million people nationally out of about 51 million uninsured, according to the Robert Wood Johnson Foundation. People will shop in state- based exchanges, entering personal information about health and income on the Web, which will generate a list of multiple plans – with varying levels of coverage and prices. If shoppers need more help, they can talk to "navigators" through a phone bank or in person.
In Colorado, an estimated 590,000 individuals and small-business employees who obtain insurance through the exchange will be eligible for federal tax credits to offset premiums by 2016. That's according to preliminary projections done for the Colorado Health Benefits Exchange Board last fall by Jonathan Gruber, economics professor at the Massachusetts Institute of Technology.
The total number of insured could top 1.1 million by 2016, depending on how many small businesses decide to use the exchange, even if they are not eligible for tax credits.
Still, Gruber estimates that 400,000 people in Colorado will remain uninsured after 2014 – about half of the current number. That includes individuals who are undocumented, people who cannot afford coverage even with tax credits and those who simply refuse to buy insurance despite the mandate.
"Insurance companies have insisted all along that the ACA's penalties are not severe enough to force all people to buy insurance," Corlette notes. The fine for those who refuse starts at $95 per person in 2014 and goes up to $695 or 2 percent of income in 2016.
Individuals and families are not the only ones affected by the ACA. Employers, health care providers and health insurance companies also will be affected.
Employers provide health insurance for the majority of Americans. In Colorado, employer-sponsored plans cover 58 percent of those insured, according to the Colorado Health Institute. But as premiums skyrocket, fewer small employers are offering insurance, a 2010 study by the Colorado Division of Insurance found. The average premium in the small group market [fewer than 50 employees] increased 22 percent between 2007 and 2009 with a small decrease in 2010. The number of "lives covered" by small group plans dropped 7 percent. Six insurance companies cited in the study reported they were leaving the small group market. (The division's study covered only small employers. However, a separate study of employers of various sizes by the Lockton Benefit Group found that rates overall were expected to climb 9.4 percent in 2012.)
Big Employer Plans Remain
Colorado Insurance Commissioner Jim Riesberg believes that larger companies are likely to continue offering health insurance to attract and retain good workers, whatever the ACA's impact. But he's not sure what will happen among smaller employers.
Corlette says that predicting the employer-sponsored market's fate is "like asking what the temperature is going to be on Jan. 1, 2014. ... But I do think employers are looking for a way out [from constantly rising premiums]. Many businesses would love to have state insurance exchanges be that exit for them." Whether they get their wish depends on how well the exchanges operate, she says.
For health care providers, especially primary care physicians, the ACA likely means new business with thousands of newly insured people. Maybe too much new business: When Massachusetts mandated coverage and established an insurance exchange – in 2006, pre-ACA – some people had difficulty finding private-practice doctors who would see them. A 2010 study by the Massachusetts Medical Society found that half of the primary care physicians in the state had stopped taking new patients, up from 40 percent in 2009.
Corlette believes that care shortages can be prevented if the country takes a more team-based approach to primary care with all levels of professionals delivering the care they are trained and licensed to provide. Colorado is piloting numerous team-based delivery models such as the patient-centered medical home, she points out. (For more about team-based delivery models, see the Fall 2011 issue of Health Elevations.)
"There might be an MD shortage, but if we are creative in our delivery systems, then no, there should be no primary care shortage," she says.
For insurance companies, the ACA offers new business opportunities with thousands of potential customers. "There's a lot of interest from companies because of all those new policies," says Riesberg, who also serves on the board that is setting up the Colorado Health Benefits Exchange. He expects health insurers with good provider networks in place to benefit the most in the new marketplace.
Rob Ruiz-Moss is leading the exchange market effort for WellPoint, Inc. The Indianapolis-based company operates in 14 states including Colorado, where it markets coverage as Anthem Blue Cross and Blue Shield. Ruiz-Moss, who also serves on the Colorado exchange board, believes that there are too many unknowns to predict exactly how the market will look in 2014, but he is optimistic.
"Colorado has done a great job to get the right people together" to plan an exchange, he says. "I'm encouraged that we'll end up with a robust market with lots of competition and lots of insurance policies from which to choose. We think that's good for everybody."
Colorado on Solid Ground
Riesberg says Colorado was well-prepared for the ACA. The 2008 recommendations of the Governor's Blue Ribbon Commission for Health Care Reform mirrored several of the ACA's key provisions, including requiring everyone to have coverage and setting up an exchange-like organization to connect people with plans.
"We did a lot of things that were the building blocks of reform," says Riesberg, a former state legislator who supported numerous health reform bills that predate the ACA.
|Do You Want to Learn More?
- The Colorado Division of Insurance, part of the Department of Regulatory Agencies, has launched a new website with the latest information about changes in health insurance at www.askdora.colorado.gov. The division also holds occasional webinars (for businesses and individuals) and town hall meetings across the state to increase residents' "health insurance literacy" about reform.
- The state's reform effort has its own website at www.colorado.gov/healthreform.
- The federal government's website provides extensive information at www.healthcare.gov.
- Numerous foundations provide information about reform, including http://healthreform.kff.org.
- To learn more about the Colorado Health Benefits Exchange, attend exchange board meetings the second and fourth Mondays of each month from 8:30 a.m. to noon at COPIC Insurance, 7351 E. Lowry Blvd. in Denver.