New Jerseyans who need individual or family health insurance in 2016 can begin shopping this week – and it’s becoming increasingly important that they take time to do so.
That’s according to insurance experts who note that while the cost of the least- expensive health plans on the federally operated marketplace launched under the Affordable Care Act haven’t increased much, the potential risk of high out-of-pocket costs has gone up.
At the same time that insurers offer the lowest possible premiums to attract customers, some plans require high deductibles and copayments.
Experts say consumers should consider such factors as their likely health expenses, their ability to withstand high costs if they require unexpected healthcare, and whether their providers are inside a plan’s network.
They’ll have three months to decide, with marketplace open enrollment beginning November 1 and lasting through January 31 for coverage that begins as soon as January 1.
Premium climbs slightly
The least expensive plan at the most popular level of coverage in 2016 will have premiums that are 3.1 percent higher than those available this year. Detailed information about specific plans is available at healthcare.gov for “window shopping” this week. Raymond J. Castro, senior policy analyst for the left-leaning think tank New Jersey Policy Perspective, said the relatively small premium increases is a positive development.
“We’re certainly hearing about large increases in other states, and that’s a very sensitive issue in New Jersey,” which already has some of the highest insurance premiums in the country, Castro noted. “Any substantial increase would be huge in New Jersey, so I think that is encouraging.”
Four levels of coverage
Plans are available at four different levels. “Bronze” plans have the lowest premiums and the highest out-of-pocket costs, with premiums rising through “silver” and “gold” plans before reaching the “platinum” plans, which have the highest premiums but the lowest out-of-pocket costs.
Silver plans are the most popular, since the federal income tax credits that subsidize the insurance for roughly 80 percent of New Jersey residents enrolled through the ACA reach their maximum at the silver level.
Oscar Insurance Corp. of New Jersey will offer the least-expensive silver plan in 2016, equal to $367 per month for a 45-year-old single person living in Middlesex County. That compares to $355 per month for the least-expensive silver plan this year, offered by Health Republic Insurance of New Jersey.
These premiums can be offset by the federal tax credits for people with household incomes between 133 percent and 400 percent of the federal poverty line, currently between $15,654 and $47,080 for a single person and between $32,253 and $97,000 for a family of four. For example, a single 45-year-old Middlesex County resident with an annual income of $30,000 would receive up to $166 in monthly premium tax credits.
But the premiums also mask large differences in out-of-pocket costs. This concerns Castro.
“To me, the real danger in all of this is people get insurance, but when they get insurance they don’t want to use it because of the high cost-sharing,” Castro said.
Examining plans carefully
For example, the least-expensive Oscar silver plan requires members to pay the entire amount of specialist visits until the member reaches the annual deductible of $2,500. For $18 more per month, a consumer could purchase a different Oscar silver plan that limits the cost of specialists to $50 per visit.
The five insurers with plans on the marketplace – AmeriHealth New Jersey, Health Republic, Horizon Blue Cross Blue Shield of New Jersey, Oscar, and UnitedHealthcare Oxford – offer a variety of different plans at each level. There are a total of 56 plans available for Middlesex County customers in 2016, compared with 46 this year. The same insurer may offer different copayments, deductibles, or provider networks in different plans at the same level.
While Horizon Blue Cross Blue Shield of New Jersey’s controversial OMNIA plans will offer the lowest premiums of any bronze- or platinum-level plans, their premiums are higher than Oscar’s lowest-cost silver-level and gold-level plans.
In each of the last two years, the companies that offered the lowest-premium silver plans attracted a significant share of all marketplace customers, since 73 percent of New Jerseyans with marketplace insurance have silver plans.
If this holds true again, it would be positive for Oscar, which had only 7,899 members in marketplace plans through June 30. This year was the company’s first on the marketplace in New Jersey.
The company with the largest price increases was Health Republic, the New Jersey organization launched under the ACA’s Consumer Operated and Oriented Plan, or CO-OP, program. CO-OPs are intended to provide nonprofit competition to larger, established insurers.
The lowest-cost Health Republic plan increased its premiums by 18 percent.
Health history should be considered
Linda Schwimmer, the president and CEO of the New Jersey Health Care Quality Institute, urged consumers to look beyond the premiums.
“I think probably the most important thing for the consumers perspective is to look back at how you used healthcare historically” and estimate their expected costs in the coming year, Schwimmer said.
Marketplace site healthcare.gov allows consumers to make rough estimates of how much their out-of-pocket costs will be under different plans.
But Schwimmer also said that consumers have different priorities and accept different levels of risk, which also go into insurance-plan shopping.
Schwimmer said it makes sense for consumers eligible for subsidies to purchase plans that are at least at the silver level in order to maximize their tax credits.
“Then you want to really look at the actual network and the actual coverage for the prescription drugs that you have,” Schwimmer said. This information is also available through the marketplace site or through insurers’ own websites.
While healthcare.gov is adding more information each year to improve consumer decision-making, including making it easier to calculate out-of-pocket costs, Schwimmer said it still isn’t easy.
“Even for people who look at this information all of the time, it’s very confusing and we still don’t have a lot of great tools,” to compare plans, she said.
“Until we have things that are really helpful for the consumer, I mean, this is just a cumbersome process,” Schwimmer said.
Consumers should not just go with the lowest-premium plan, she emphasized.
“There are ramifications that come from that short-term, easy way to make the decision,” such as high out-of-pocket costs, she said. Therefore, “it’s worth meeting with a counselor or talking to the trained navigators if you’re not sure, because it’s a really important decision for your family.”
Information on certified application counselors and navigators – two terms for people trained to assist with marketplace applications – is available on healthcare.gov.
Castro said he’s hopeful that consumers are becoming more sophisticated shoppers as they enter the third year of marketplace insurance.