Posted by: bkivey | 7 October 2013

Covering Oregon

The health insurance exchanges opened for business on the first of the month. Well, maybe ‘opened’ is not entirely accurate, as in many places (including Oregon) one could compare plans, but not actually buy one. The local insurance exchange is ‘Cover Oregon’, so I took the site for a test drive.

The website is clean and easy to navigate, complete with a snazzy logo. There are a number of links to supplemental content at the bottom of the homepage, including a link to view all the ads. I followed the link to the FAQ page. Some samples:

How is Cover Oregon funded?

Cover Oregon operates at no cost to the state. It is funded by federal grant dollars through 2014; after that, it will be self-sustaining through an administrative fee charged to insurance carriers. Cover Oregon worked closely with national and state experts to develop enrollment and financial projections; these show Cover Oregon becoming financially self-sustaining by 2015.

Federal grant dollars aren’t free money, although generations of politicians have managed to convince a lot of people otherwise. ‘Administrative fees’ aren’t free money, either. They’ll be passed on to the consumer. As for the ‘enrollment and income projections’; models are only as good as the input and algorithms. I’m taking bets now that Cover Oregon won’t be self-sustaining in 2015.

How will Cover Oregon keep health coverage costs down?

Cover Oregon will help make coverage more affordable by providing access to financial assistance that is available through the Affordable Care Act. However, health insurance premiums are driven by the cost of medical care. So, the key to decreasing health insurance premiums is lowering medical costs. Cover Oregon is engaged in statewide efforts to reduce health care costs, such as the coordinated care model being piloted in the Medicaid market, with the idea that once Cover Oregon is up and running, it can move toward incorporating these concepts – improving care and lowering costs – in the commercial insurance market.

‘Financial assistance’ is government-speak for ‘other people’s money’. People above a certain income level are finding out just whose money that is when they go to buy coverage. For basic economic reasons, ‘improving care and lowering costs’ simply isn’t going to happen. For some segments of the population, access to health care will improve, but at the cost of reduced access and increased cost for a lot more people.

What is the deadline for applying for health coverage, and what will happen if I miss it?

Individuals and families can apply for health coverage at any time throughout the year. However, they can only enroll in a qualified health plan during the open enrollment period, unless they experience a qualifying event. For 2014, the open enrollment period is October 2013 through March 2014. In future years, the open enrollment period will occur between October 15 and December 7. Those applying for coverage offered by their workplace will need to do so within the time frame set by their employer.

And completely ignoring the consequences of not obtaining coverage. I’ll tell you what will happen. You will be assessed a fine. The fine will increase every year until 2016, when it will max out at $695 or 2.5% of household income. The IRS has added tens of thousands of agents just for Obamacare, making the US the only country in the world that uses the federal tax collection agency to enforce health care law.

Nowhere on the parts of the site that I looked is there a statement that nearly everyone in the country will be required to obtain health care coverage starting 1 January 2014. Even on the part of the site that purports to answer questions, that fundamental fact is ignored.

Next, I took a look at what plans are available on the exchange. The form for browsing plans is quick and easy to fill out, and the site came back with 75 unfiltered results. The cheapest is $231/month, comes with a $5,250 deductible, $6,350 out-of-pocket, and covers about 60% of most medical expenses. There is no vision or dental. The most expensive plan comes in at $530/month, has a $1,000 deductible, $1,000 OOP, and covers nearly all the cost of the more common medical needs. A vision plan is included. I checked out the most expensive plan from the company offering the least expensive plan. The deductible is a little lower, the OOP is significantly higher, and it covers 85% of most expenses, all for $395/mo. There’s no vision plan. People over 30 can’t purchase catastrophic health plans. Even if you purchase coverage away from the exchange, catastrophic coverage won’t satisfy the law if you’re over 30.

For comparison, I looked at plans for a 25 year old making $25,000 annually. All other parameters were unchanged. The cheapest plan on the exchange is $130/month, requires a $5,000 deductible and $6,350 OOP, and covers half of some medical expenses. Office visits and prescriptions are significantly more expensive than other plans. There’s no vision plan. The same company offers a catastrophic care plan off the exchange for $120/month. Deductible and OOP are both $6,350, and doctor visits are $45 for the first three visits. Subsequent doctor visits, and all in-network medical services, including prescriptions, are 100% covered. This may be the only reason to be 25 again.

The most expensive plan for a 25 year old comes in at $262/mo, has a $1,000 deductible and $6,350 OOP, most tests and preventive visits are covered, while most medical expenses are either 90% covered or require a $20 copay. There’s no vision plan.

The Cover Oregon site is fairly easy to use, and is useful in a limited way. You can’t buy plans through the site, and there’s no apparent way to find out about a particular plan without going off-site. I expect both problems will be addressed in the near future.

As for the plans themselves, I could afford $230/month for health insurance. The main reason I don’t is because I’m human, and I resent someone telling me that I have to do something, As an American, I really resent it. Then there’s the fact that the numbers don’t work. I am physically active, maintain a reasonable weight, and have no serious chronic conditions. I had mild hypertension a couple of years ago, but that’s controllable with a prescription costing me some $15 every three months. That’s the retail price, not a co-pay. I have a standing semi-annual appointment with my doctor, so he sees me often enough to catch incipient problems. Those visits run me $77 each. I had an acute problem this year that required treatment, but I don’t think I’ve spent $500 on medical care this year. Even on the cheapest plan offered on the exchange, and assuming inflated medical costs from insurers who accept insurance, I still wouldn’t have made the deductible. So I’d be out-of-pocket for my medical care, plus the nearly $3,000 for premiums. For the time being, paying the Obamacare tax is the more reasonable option.






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