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Buying Health Insurance? Skip the Exchanges

Beth Braverman
Why Health Care Is Still a Winning Sector

The problematic rollout of the online Obamacare exchanges has meant that just 10 percent of eligible people who visited the sites were actually able to enroll in a plan in their inaugural month.

That’s not for lack of interest: The government has reported that 27 million people visited health exchange websites, and state and federal call centers received 3 million calls with questions. But technical difficulties have made completing the enrollment process nearly impossible.

Consumers have complained that the sites are buggy and confusing, while lawmakers and other critics have derided the federal site as hopeless and vulnerable to hackers. Despite these issues, the law still requires all individuals to have insurance by next year. Open enrollment runs through March 31, but consumers need to purchase insurance by December 15 in order for coverage to kick in by the first of the year.

So what’s a fed up, security-conscious consumer to do? Skip the exchanges altogether. Consumers who make too much money (about $46,000 for one person or $94,000 for a family of four) to qualify for federal insurance subsidies have always had the option of purchasing off-exchange plans. “People who aren’t eligible for subsidies are increasingly turning to options other than Healthcare.gov to purchase plans,” says Jennifer Kowalski, a vice president with Avalere Health, a research and consulting firm.

Yesterday, the administration announced that subsidy-eligible consumers will also soon be able to buy plans without using the exchanges. About 45 percent of individuals and 52 percent of families in the private insurance marketplace are eligible for subsidies, according to GoHealth. However, experts say that won’t be possible until the government has completed some updates to its data hub that will allow carriers and agents to confirm subsidy eligibility for consumers.

Several alternatives
Those looking to purchase a health plan without using the exchanges have several options. They can search for insurance via an online broker like eHealth, by directly contacting the carriers themselves, or by working with an insurance agent. “The exchanges are not the be all and end all of buying health insurance,” says Dave Mordo, vice president of education, compliance and Medicare operations for New Jersey-based broker Walsh Benefits.

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You’ll want to look for the total out-of-pocket cost of the plans, including premiums and deductibles. The online brokers will have a user-friendly interface that allows you to easily compare plans, while purchasing insurance through the carrier directly may require you to make the comparisons yourself. That option might still make sense if you’ve got an existing relationship with a doctor that only takes insurance from a few carriers.

If you’re unsure about what type of coverage you need, or would feel more comfortable with a person guiding you through the process, sitting down with an agent might be the smartest way for you to buy insurance. Agents can also help you purchase insurance through the online exchanges.

A better option for some
Some consumers, especially those in states where few insurers have opted into the exchanges, may find more options available for purchase offline. They may also find plans that are accepted by a wider network of physicians and hospitals.

Many carriers sell the same plans both on and off of the exchanges, but other insurers offer plans with slightly different pricing and coverage than those sold on the exchanges. Consumers who want to use a subsidy to buy insurance must purchase a plan that’s offered online.

Even so-called “off exchange” plans still have to offer the 10 “essential health benefits” required under the Affordable Care Act, including hospitalization, prescription drugs, and maternity care. Just as on the exchange there are “metallic” levels of coverage, bronze plans have the lowest premiums and cover 60 percent of healthcare costs, while platinum plans are the most expensive and cover an average of 90 percent of costs.

Shoppers who opt to buy insurance without using the exchanges still need to compare plans carefully to make sure they’re getting the right coverage for their needs and that the network includes doctors with whom you have an ongoing relationship. “An informed consumers is the one who is going to save the most money,” says Kevin Coleman, of HealthPocket.com.

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