With full implementation of the Affordable Care Act (ACA), January 2014 marked the beginning of a new era in health insurance in the US.
For the chronically uninsured and for those with pre-existing conditions, it’s been a long and financially perilous wait for all of the ACA benefits to kick in.
For free-market conservatives, the 3-year waiting period provided time to fight “Obamacare” with dozens of repeal votes in the US House of Representatives, with a Supreme Court challenge, and with a ground war against Medicaid expansion at the state level.
December 23, 2013 was the cut-off date for enrollment in ACA insurance plans which began January 1, 2014. During the month of December, it was my task to shop Small Business Health Options Program (SHOP)(1) on Healthcare.gov to purchase insurance for The American Journal of Medicine’s employees.
This is the story of one small business’ route to “affordable” care.
Our Journey
Our journey began long before the premier of Healthcare.gov,(2) the much-maligned ACA enrollment website, and even before the ACA was signed into law in 2010. At the Journal, we had been dissatisfied with our health insurance plan for years. Like clockwork, the cost went up 10-25% annually, forcing us to rethink coverage multiple times in order to live within our budget. We also were dissatisfied with the limited number of even more expensive alternative plans offered to us.
On the Journal’s editorial pages, multiple authors have written about the state of healthcare in the US (3, 4, 5, 6) and different aspects of reform,(6, 7) including Medicare for all.(5, 6) In 2009, the Journal published ground-breaking research which found unpaid medical bills to be the number 1 reason for bankruptcy in the US.(8) In 2011, AJM published a follow-up research study by the same Harvard group. The second paper showed that although nearly all Massachusetts residents had health insurance after reform was initiated, medical bankruptcies did not decrease; people bought the coverage they could afford, which resulted in “widespread” underinsurance.9
Given our first-hand experiences as a health insurance consumer and our editorial bent, the Journal was ready to sign up for the public option back in 2009. By late 2013, we were just glad that the ACA made it through the gauntlet of repeal votes and the Supreme Court. Contrary to mainstream news stories about people and small businesses wanting to keep their existing inadequate and non-ACA-compliant healthcare plans, we had been waiting for 3 years to dump ours.
In early November, when news stories about the “botched” rollout of the ACA website flooded the airways, I started poking around the plans and prices on Healthcare.gov. Although the sheer amount of information on the ACA website was daunting, functionality was fine—until I couldn’t create a log-in and an account. Stalled at this juncture, I gave up for a few weeks until President Barack Obama announced at the end of November that the ACA website had been fixed.
Shopping the SHOP
Under the ACA, individuals and small businesses with fewer than 50 employees can use HealthCare.gov to purchase insurance. During the first week of December, I started shopping the SHOP in earnest. After entering the basic information—the state and county location of the editorial office and the ages of our 3 employees—the site generated a massive spreadsheet of information, prices, options, brochure links, and telephone numbers for the 84 plans available for small businesses in Pima County, Arizona.
To sift through the options and prices and discuss them with employees and my boss, I downloaded the data to Microsoft Excel and printed them out. Even though I hid at least 30% of the 75 columns of data before I printed out the spreadsheet, it was 4 feet long when the legal-sized sheets of paper were taped together (Figure).
With colored highlighters and a long ruler in hand, I started to comparison shop. Initially, I looked at the basics—office visit cost, specialist cost, and deductible—and then I compared prices for the Journal and the employees who wanted to add dependents to our insurance plan. When a plan looked interesting and affordable, I went back to the computer and clicked on the details—co-pays, co-insurance, emergency room visits, urgent care visits, per person and per family deductibles, total-out-pocket cost, drug benefits, and special options like dental and vision add-ons.
After approximately 3 full days of intensely studying Healthcare.gov and investigating insurance carrier websites, I narrowed it down to 3 or 4 HealthNet silver plans. I was about to contact our insurance broker, when she called me with the “good news”. Our new Aetna contract was ready to sign for 2014, and of course, there was another price increase. Having no intention to renew our old contract, I asked the broker for help in finalizing the ACA details and signing up employees. (Healthcare.gov suggests that businesses work with insurance brokers or agents, but it is not required.)
What Will It Cost?
The insurance broker was instrumental in the final decision-making and enrollment because, although I had had no problems calling or chatting online with ACA help desk personnel, I was never able to reach a live person on the phone when I called multiple insurance companies. The broker had connections that I didn’t.
In 2013, the Journal paid $1287 per month to cover 3 employees under our Aetna plan, and an additional $240 per month was paid by 1 employee to cover his 2 minor children. Other employees tried to add dependents to the Journal’s plan in 2013, but it was cost prohibitive. In fact, to add one 60-year-old spouse the quoted price was $820 per month. (The Journal pays employee costs, but employees must pay the full cost for dependent coverage—a common business practice.)
The Journal chose a $30/$50/$2000 Open Access silver plan offered by HealthNet because we wanted to keep the monthly cost down but still provide adequate health insurance. (Silver plans are designed to cover 70% of cost of care.) Bronze plans have the lowest monthly cost but the highest cost of service to plan members. Remembering the cautionary tale about the underinsured in Massachusetts,(9) I steered clear of the bronze plans. As the metals go up in value (bronze, silver, gold, platinum), the cost per month and the overall coverage increases.
The HealthNet silver plan has a higher deductible than our old Aetna plan ($750 vs $2000 for an individual), but other costs vary only slightly (ie, office visit $20 vs $30). Being a basically healthy group—after all we work for a medical journal—we went for a lower monthly cost of the silver plan. Insurance is basically a bet. Are you betting you’ll be healthy or sick in the future? Since we have no smokers, no diabetics, and no morbidly obese employees, and we all exercise some, we bet on health.
Contrary to news stories that report the dire financial consequences of Obamacare to small businesses, the Journal will save $200 per month under the ACA insurance plan. There were cheaper silver plans through HealthNet, but those offered a limited number of doctor and hospital choices. For example, for $100 less per month, the Journal could have opted for the cheaper, less comprehensive HealthNet Community Care $30/$50/$2000 silver plan, but all employees would have had to give up their current doctors, would not be able to go to the University of Arizona Medical Center for in-network hospital care, and would not have in-network access to University of Arizona (UA) College of Medicine doctors. For the additional monthly cost, our chosen plan allows our employees to keep their long-term primary care doctors and to have in-network access to College of Medicine doctors (including all of the Journal’s Tucson-based editors) and the academic medical center. (As I mentioned, although we bet on health, we decided if anyone got really sick, we wanted in-network access to healthcare offered by an academic medical center.)
As for dependent coverage, the employee with 2 little ones will get increased coverage—medical, dental, and vision coverage for the 3 of them—for about the same monthly cost. Those of us who couldn’t afford to add spouses to our old plan can afford the out-of-pocket costs to add them to new ACA plan. Remember the $820 per month quote to add 1 spouse in 2013? That person costs $500 per month under the HealthNet silver plan—a $320/month savings. In fact, for approximately $1000 per month, 2 spouses and 1 college student were added to the Journal’s plan.
Lessons Learned
1)The sheer volume of information and plans available to small businesses in 1 county was daunting. In the end, using an insurance broker to sort out plan details, compare prices, and cut through red tape with the final sign-up of employees was invaluable. (According to the ACA website, the insurance companies pay the brokers—not the small businesses.)
2)The ACA website worked perfectly after the November fixes. In fact, the ACA website has tons of valuable, easy-to-read information about the Affordable Care Act and options. Compared to multiple insurance company websites, the ACA website was better organized and easier to understand—although not as flashy.
3)It was easier to reach the ACA help desk on the phone than it was to reach a real person at any of the insurance companies. In fact, I never reached a real person at an insurance company, but on Sunday, December 22 (the day before the deadline), I chatted online with an ACA representative about our application.
4)The Journal and the employees saved money by shopping the ACA Marketplace. Yes, we purchased a different type of insurance plan than we had had in the past. The wide variety of insurance choices—which were not available to us before the ACA—made it possible for us to tailor the insurance to our employee group and save money at the same time. Small businesses owners who are concerned about cost can choose cheaper plans than the one we chose and still offer a valuable benefit to their employees.
5)The long-term economic impact of the ACA has been hotly debated. Proponents predict a job-creation boom. Foes predict financial ruin. Requiring individuals to purchase insurance under the ACA—as they do under the Massachusetts reform plan—was one of the most-contested aspects of the ACA. Although the ACA dependent coverage cost to our employees is cheaper than the quote from the previous year (ie, $500 vs $820), it is not insignificant. Will consumers forego or delay other purchases because they now have an additional monthly bill? Will the US medical bankruptcy rate go down, or will it stay the same, as it did in Massachusetts, post-reform? Will Americans buy the level of insurance they need under the ACA or the level they can afford?
In the end, the Journal had a plethora of plans and price ranges to choose from at HealthCare.gov and saved money on its insurance costs. Employees also saved money on medical coverage, added dental and vision coverage, kept our own primary care doctors, added affordable coverage for previously uninsured or underinsured dependents, and have in-network access to academic medicine.
What could be better? Medicare for all.
To read this article in its entirety, please visit our website.
– Pamela Powers Hannley, MPH
This article originally appeared in the March 2014 issue of The American Journal of Medicine.
