Overwhelmed by Options?

There's freedom of choice in health care, but wading through the market is daunting. Here's what to consider.


Illustration by Leslie Herman

"Freedom of choice is what you got. Freedom from choice is what you want."

The band DEVO penned this line back in 1979. It seems wrong on its face. Who doesn't want more choice? But some studies suggest they were right.

Sheena Iyengar, a Columbia University professor of business, researched how people deal with choices when it came to something as simple as choosing a brand and flavor of jam. Iyengar said that in theory, the presence of choice was appealing. But in reality, many people found the choice to be debilitating, often leading to confusion, remorse, and even bad choices, just to make the drama end.

In everything from shopping at the grocery store to picking a cable TV package, we struggle with choice. For many people, real choice is being inserted into the health insurance system for the first time.

Typically, we haven't had much to choose from when it comes to insurance. Until now, employers offered a few choices, if we were lucky. Far too many people simply had no options — either they didn't qualify for a company plan, couldn't afford it, or had a pre-existing condition that shut them out of the market. That changed with the implementation of the Patient Protection and Affordable Care Act.

The new health exchanges opened for business in October, and there were myriad technical problems with the healthcare.gov website. There was more confusion when some individual policy holders were told their plans were being discontinued. But since health insurance is now being mandated, many people, whether they want to or not, will be buying a plan for the first time — or shopping for a new one.

Crunching the Numbers

Buying health insurance has never been easy. Even health veterans struggle trying to compare costs, benefits, co-pays, and networks. So for a rookie, understanding what you are seeing can be difficult.

Compound that with the sheer number of plans that are available, and you have a recipe for confusion. The typical person who shops on Michigan's online insurance marketplace will have eight different companies to choose from and more than 40 plans that they qualify for.

This is undeniably a positive thing; competition is causing companies to price plans more aggressively to lure customers. Price can be a powerful motivator in choosing a plan, but cheaper isn't always better.

How much do you want to pay out-of-pocket for doctor visits and prescription drugs? How much of a deductible can you handle before full coverage kicks in? Since we don't have a crystal ball to tell us what health challenges are coming over the next year, it's tough to know. So that's choice one: What level of coverage do you need?

Go for the gold … or platinum?

In an effort to streamline the process, there will be four plan levels: platinum, gold, silver, and bronze. The better the precious metal, the better the benefits. The platinum plans typically require a 10 percent out-of-pocket cost, gold 20 percent, silver 30 percent, and bronze 40 percent. So, with a bronze plan, you'll pay a much lower premium, but pay more out-of-pocket costs. The opposite is true at the platinum end of the spectrum.

But all plans that fit into these categories are not the same. There's still a lot to consider. Who will the provider be? Most of the companies operating in Michigan's market are familiar names, but some may be open to you for the first time. Consider their customer service record. Are they responsive to questions? Do they handle claims questions efficiently? Also, what hospitals accept the insurance plans, and what doctors are in the network? Some of the plans may look great on paper, but don't have the same level of access to care. Sort through all of that, and you still have the question of price.

Making decisions

For those willing to wade through the process, there are good options that make sense for just about every budget. Unfortunately, with so many options — and frustration with early technical gaffes — many may forego insurance altogether, and pay what seems like a small penalty when taxes are due in April.

That is your right (and choice). But is it a good one? Navigating this system won't be easy, especially early on. But the hassle may be worth it.

Health insurance, as painful as it may seem, is one of the most significant decisions you can make. Having it is often the difference between getting effective care for an illness or injury, or putting off treatment. If that isn't enough to convince you, consider this: According to studies at George Washington University, the tab of an average visit to an emergency room hovers around $1,000. The average cost for a five-day hospital stay is $33,000. Until they figure out a way to get those costs down, insurance seems like a bargain in comparison.

Need help?

A number of companies have sprung up to help you wade through the choices, for a fee. But there are a few free resources to offer some guidance:
> Michigan Consumers for Healthcare coalition, consumersforhealthcare.org
> Enroll Michigan, a statewide network of nonprofit agencies, enrollmichigan.com
> ACCESS, an Arab-American human services nonprofit, accesscommunity.org

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