Shopping For Health Insurance Can Be An Adventure

A friend of mine is getting divorced, quitting his teaching job and moving out West. But there’s a hitch. He needs health insurance. He qualifies for COBRA, but it’s a bad solution. Having an expensive Blue Cross plan in Pennsylvania, while living 2,000 miles away, is not practical.

So he started shopping for a new insurance plan. I tried to help. The first stop was HealthCare.gov, the White House’s new and lauded health reform portal. One button on the site invites you to, of all things, “Find Insurance Options.” You’re asked to fill in basic information like your zip code, your health status and income level. It spits out a matrix of plans cross-tabbed by deductible, premium and carrier.

Yet after completing the find-a-plan wizard, you discover that it doesn’t allow you to actually apply for coverage. After selecting the best plan you have to surf to the Web sites of Humana, Cigna or whichever, and start from scratch.

I was curious what it would be like for other kinds of applicants. On another visit I logged in as a Senior, seeking Medicare coverage but unable to afford my out-of-pocket costs. It wasn’t very helpful. I was surprised that there was no attempt to enroll my older avatar in a low-priced HMO. After some clicking, I ended up on a Medicare.gov site with phone numbers for applying for Medicaid. It’s not exactly the Amazon.com of health coverage. The Washington folks are ambitious, but there’s work to do.

The next stop was the online broker eHealthInsurance, which offers a similar user interface to the government site. Plans are displayed by premium, cost-sharing, carrier and plan type. Here the problem may be information overload. Unless you have a good idea of what you’re looking for, you could end up reviewing 50 different plans. Maybe that’s why some people prefer to use live insurance agents. My friend and I pedaled around on the site for a while and considered different options. He’s luckily pretty healthy, single obviously, and wanted to spend less than $200 a month.

One plan from UnitedHealth had a $129 premium but you get no benefits until you satisfy a $2,500 deductible. On the flip side, there was no co-insurance. So $2,500 in a year is the most you’ll spend if you stay in-network. Still my friend wanted a plan that was going to cover basic office visits. He wants to feel like he has insurance.

Another plan, from Kaiser Permanente, cost $162 a month. Its deductible was $1,500. Basic office visits were only $30, regardless of whether you’ve met the deductible. Yet the deductible can be misleading. If God forbid you need a heart transplant, or simply end up in the ER once or twice, you’ll blow through the deductible. Then a 20% coinsurance kicks in. The max out of pocket for the year is $6,000. It wasn’t a bad plan. But the deal breaker here was that the Kaiser network is narrow in Colorado, where we were looking. Only one hospital in the area appeared to be in-network. We didn’t know if it was a great facility or rinky dink. The plan had no out-of-network benefits. So if you wanted a second opinion at a big hospital in Denver, you’d have to pay out-of-pocket.

The last plan, which seemed to offer the best of both worlds, was one from Aetna at $187 a month. Aetna has a very broad network, which was viewable via the brokerage Web site. And it also shared the feature where an office visit to a primary care doctor is only $30, regardless of whether you’ve satisfied the deductible. My friend’s soon going to apply for it.

We didn’t really consider the smaller insurers, like Celtic or the Rocky Mountain Health Plan. It’s not that we know they are bad, but coming from another state, we lacked a frame of reference. A good smaller plan, as I’ve written, may sometimes be your best option. But make sure you’re settled somewhere and know the medical landscape.

*One related anecdote. I recently played around with the Massachusetts Health Connector Web site. That’s where you go to buy mandated coverage in the Bay State. I put in my own vitals and a Cambridge zip code. The interface was exceptionally easy to navigate. And with standardized tiers of benefits, labeled by Olympic medal color, you know what you’re getting. One downside: even the bronze plans cost about twice as much as equivalent coverage in Colorado. Out West they have fewer strictures on selling insurance but sick people are out of luck. A major upside: unlike the ObamaCare Web site, you can buy insurance in about five minutes over the Connector. It’s so fast that while testing the site I actually bought a plan by mistake from Harvard Pilgrim. I got an email a few minutes later demanding my first payment. Now I need to figure out how hard it is to cancel.