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Insurance Exchange Consumers Spending More Now, Saving Later

Tuesday, January 14, 2014

Experts say the Affordable Care Act health exchanges so far appear to be attracting the people they were set up to serve — those with too much money to qualify for Medicaid but not enough money to buy insurance.

Newly released figures show roughly two-thirds of people using the exchange qualify for federal subsidies.

Peter Newell, from the United Hospital Fund, is encouraged that people seem to be avoiding the very cheapest levels of coverage and are spending a little more upfront, so that they are not hit with huge out-of-pocket expenses later.

“It seems like people are taking advantage of subsidies,” Newell said. “There’s a nice mix and balance between the product selections New Yorkers are making so far.”

Newell and other health experts say people who opt to spend more on their monthly premiums are less likely to face "sticker shock" when they go to the doctor. Others will discover they need to pay hundreds, if not thousands of dollars before their insurance actually kicks in.

For instance, the deductible on a standard Bronze plan is $3,000 for an individual and $6,000 for a family, regardless of what the monthly premium is or which insurance plan is selling it.

For standard Gold plans, those figures are $600 and $1,200, and for Platinum plans, there are no deductibles at all.

Deductibles for Silver plans are somewhere in between, but people with relatively low income – around $30,000 for an individual and $60,000 for a family of four – can qualify for extra subsidies to reduce the deductibles and other out-of-pocket expenses.

In New York, 20 percent of insurance exchange enrollees so far have bought Bronze or even cheaper Catastrophic plans, and 68 percent have purchased Platinum, Gold or specially discounted Silver plans.

New Jersey is part of the federal exchange, healthcare.gov, and does not have exactly comparable breakdowns. In the Garden State, 12 percent of purchasers bought Bronze or Catastrophic plans, 64 percent bought Silver, and 24 percent bought Gold or Platinum.

Previously, health experts expressed concern that many people would choose high-deductible plans – and then, when faced with high out-of-pocket costs, either avoid necessary healthcare or get the care but renege on medical bills.

Other experts are concerned that subsidies are too generous, and that high deductibles are a good way to curb runaway spending on things like unnecessary tests and pricey drugs that perform no better than generics.

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