The card should say MOOPS

Rank the following plans in terms of most attractive benefit structure.

Plan A: $2,000 deductible
Plan B: $400 deductible and coinsurance
Plan C: $0 deductible and coinsurance

C,B,A is how the plan designs rank in terms of deductible attractiveness.

Kaiser Family Foundation current messaging is deductible focused.

But is deductible the number to look at?

It really depends, the best number to look at is the actuarial value. The three plans are 81%, 71% and 70% AV.

Plan A is the gold plan at 81% actuarial value. The $400 deductible Silver is slightly richer in benefits at 71% actuarial value than the no deductible Silver. Both B and C have a 60% coinsurance. Plan B has 60% coinsurance with a $5,500 maximum out of pocket (MOOP). Plan C has no deductible but a 60% coinsurance to a MOOP of $7,150.

Plan C is the worse plan for anyone who spends a night in a hospital. They bear the largest proportion of the total pool’s cost sharing obligations. For the same actuarial value, higher deductibles advantage sicker individuals while more co-pays and coinsurance advantages people with minimal utilization.

We need to sharpen our thinking and our language. Deductibles are an easily number that can be readily gamed. I think the combination of maximum out of pocket exposure and actuarial value are the numbers that actually need to be communicated in a seven pitch as those can’t be as readily messed with.






24 replies
  1. 1
    JPL says:

    David, I hope that MSMedia contacts you, because you are a wealth of information. Thanks!

  2. 2
    raven says:

    never mind

  3. 3
    Mnemosyne says:

    Here’s the ugly spiral, though: people who have a high deductible will avoid getting care. We already know this. People with a low or no deductible are more likely to go in and get minor things taken care of before they blow up into major things.

    So the family with a high deductible will pay less if they get hospitalized, but the family with a low or no deductible may avoid that hospitalization entirely by getting timely care.

    And don’t get a big head with the whole Hiltzik thing. Remember, we knew you when you were writing about dildos at soccer games. 😉

  4. 4
    kindness says:

    Really what is going to happen is it will go back to what it was before the ACA. Some people won’t have doctors and will get their care via the Emergency Room. Some of those people won’t have money to pay and hospitals will charge everyone who does a surcharge to cover those costs. Just like they used to do. Funny thing there. For a party that touts personal responsibility as one of it’s primary virtues the medical plan they are forcing on all of us leaves us holding the bag for those that won’t have insurance. But then again, it isn’t a Health Care Bill. It’s a tax cuts for the wealthy bill. It does that very well.

  5. 5

    The deductible thing Kaiser tweeted is a good way to communicate it politically right now, though.

  6. 6
    Waratah says:

    I think that the first thing people will look at is how much out of pocket expense.
    I agree with Major Major Major Major.

  7. 7
    Earl says:

    If you get hurt having to drop $7150 pp is *barely* health insurance at all, unless we define health insurance as get hurt and pay 1/4 of a new car. Maybe watching a deductible + moop go from $300 -> $6k or more will get them off their asses to vote for Dems. But I doubt it.

  8. 8
    owlface says:

    Useful, thank you!

  9. 9
    wmd says:

    When I was deciding between options last year the choice was an ordinary PPO with a $500 deducitble and MOOP of $2560, 10/90 copays for services and prescriptions after deductible met, or a High Deductible plan with a $1500 deductible and a MOOP of $2180, , 20/80 copays. I looked at my existing prescription costs under both plans and realized I’d hit the MOOP in either case so that made my decision simple.

    Getting cancer makes it an even smarter choice. End of the year I’ll have an HSA with next years MOOP already in place. When I transferred care to Stanford I’d already hit the MOOP due to 4 separate imaging sessions and $1400 in prescription cost in March. It’s very comforting to know I’m not getting hit financially as I get my HPV+ squamous cell oropharyngal cancer cured. If all goes as planned the 3 month post treatment PET/CT will happen this calendar year, and any long life prescriptions (Epipen) will be refilled as well.

  10. 10
    eclare says:

    @Earl: I do not get insurance through the ACA, I have employer provided health insurance, and my deductible is around $6,000. Nothing gets paid until I pay that. As a result, I have not been to a doctor in years. My thinking is that at least having this coverage means I won’t have to declare bankruptcy because I’ve been in a car wreck, but that is it.

  11. 11
    wmd says:

    @wmd: Left out an important point – my employer required me to kick in ~$75 semi monthly for the PPO. My contribution for the Hi deductible plan is $0, freeing up $1800 to fund an HSA. Knowing I’d hit the MOOP I put this year’s bonus into the HSA in early February.

    I’m very fortunate to have a generous employer… all of this is for a single 56 year old male, I don’t recall the numbers for a spouse or children to be added to the policy – it could change the calculus.

  12. 12
    satby says:

    @wmd: I’m glad that your plan is what you need as you get treatment and wish the best possible outcome of remission and a long happy life. But your employer’s plan isn’t based on generosity; it’s part of your salary compensation.

    Making us think employees are beneficiaries of generosity rather than a market calculation of what attracts the best talent is how the MOU create confusion about whether things we have earned are things some corporation GAVE us out of charity.

  13. 13
    Another Scott says:

    Correct me if I’m wrong, please, but the MOOP doesn’t include the actual cost of the corresponding policy, does it? It doesn’t in the statement I get from BC-BS when I have a medical visit.

    It seems to me that apples to apples comparisons of a Silver PPACA plan and a BCRAP plan for someone in the various income levels – total consumer costs (including relevant subsidies and CSRs), total benefits, total deductibles, total limits – would be the best ones to make.

    Thanks.

    Cheers,
    Scott.

  14. 14
    Mnemosyne says:

    @satby:

    A couple of years before the PPACA passed, the Giant Evil Corporation I work for started offering a no-cost health insurance option that was the automatic default unless you signed up for a different plan or showed that you had insurance coverage by other means (like a spouse’s plan). Employees were NOT allowed to go without health insurance.

    But even that was not out of the pure kindness of their hearts — IMO, it was a combination of business reasons (too many employees leaving or going bankrupt because they didn’t have insurance) and the fact that they have a very solid name as a family-friendly company and it would severely damage their reputation if it came out that an employee without health insurance lost their job after getting sick. Therefore, automatic coverage.

  15. 15
    jmw says:

    Not quiet on topic but I think this is a fascinating look into what ‘normal’ Republicans are telling themselves to support the bill. Kirby was the chair of the R party in Washington. Skip to 16:00
    http://kuow.org/post/week-revi.....-road-rage

  16. 16
    Ruckus says:

    @satby:
    A hugely valid point. When I supplied HC insurance for my employees it certainly counted towards the cost of doing business. It was not in any way charity, I didn’t provide it in the spirit of generosity, I did it for two reasons. First, I could not attract good help without it and second I wanted it for me. The only people who didn’t care were the young guys, the apprentices and helpers. The insurance was a plus they rarely if ever used. It meant little to them. The older people and the one’s with families, they knew what it meant not to have insurance.

  17. 17
    rikyrah says:

    I appreciate the information, even if it makes me sad to read it.😠😠

  18. 18
    CZanne says:

    Thanks to you, Dave, we did this calculation last year, when our employer based insurance shifted in May. (There were reasons. It was annoying.) We share his insurance because my job is officially a contract position, so I’m not eligible to buy into University Health or the state employees’ plans. We had three options: a low bi-weekly cost with a high deductible, high MOOP and HSA, a middle deductible with high MOOP, high copays and low-ish co-insurance percentage, and a low deductible, low co-pay, low co-insurance plan and moderate MOOP with a high biweekly cost. If I recall correctly, they were all within 3 percentage points for actuarial value. (Upper 70s, low 80s, I think.)

    We went with the last one, on the reasoning that we won’t miss the well under $100 difference every two weeks between the first and third, or the $50 difference between 2 and 3, but we don’t want to rely on our future selves to have sufficient cash on hand for a high deductible when one of us breaks a bone (which happened *during the transition*) or if an expensive test or procedure comes up. (I have a heart murmur.) It’s not that we’re spend-thrifty (not really) or bad at saving (we could do better, but we’re not failing that class), but we both grew up poor, we both realize that money can evaporate, and that sometimes several expensive things happen all at the same time.

    I have seen deductibles make people delay seeking care in the bad old days — my mother’s second husband kept putting off several tests because he didn’t want to spend the money (or go to the doc, or have a prostate test, or have a colonoscopy, or … it wasn’t just the money). By the time they caught his prostate cancer, it had significantly metastasized. His version was extremely aggressive, but if he’d done the tests even a year earlier, instead of waiting to feel better and collapsing at work when his kidneys shut down, it probably wouldn’t have killed him so very quickly. That same reluctance to access care is what drives people to supplements, MLM schemes and alternative “medicine”. And I’m watching someone with a high deductible fail to deal with a mental health crisis, because, though the baby’s birth will be covered under another plan, this person doesn’t feel they can spend $200 a session for the first twenty sessions right now while they spend up their deductible. If they could just pay their copay, they’d be on the couch. (Yes, I know, parity. Not all employer plans.)

    The night in hospital sucks, but for most younger people, that’s not their daily experience of health care.

  19. 19
    Another Scott says:

    TheHill:

    Leaders in the Koch brothers’ influential political network bashed the new Senate Republican health care legislation attempting to replace the ObamaCare for not being conservative enough, The Associated Press reports.

    Tim Phillips, the president of the Koch’s political arm Americans For Prosperity, told reporters that they are “disappointed that movement has not been more dramatic toward a full repeal or a broader rollback of this law, ObamaCare.”

    It’s not over yet. Stay strong, folks. Keep fighting.

    Cheers,
    Scott.

  20. 20
    randy khan says:

    From a pure dollars and sense perspective, it’s true that C is the worst, but for a lot of people the deductible in A would create significant financial distress and as noted above, it would create disincentives to get care. A is basically a policy for people who have money.

  21. 21
    MoxieM says:

    Are they all HMOs, or are any PPOs in the mix? I would pay more for a PPO (as an individual buyer, or any other kind of buyer), than I would for an HMO.

    Here’s why: I need lumbar steroid injections (to walk, and do self-care, and to be able to work, etc.) , and my current HMO is very loathe to approve them. The shots are the most effective, most conservative treatment for me, and my previous crummy HMO charged a higher deductible, but I was able to get the shots when I needed them and they were medically OK.

    So my personal decision tree revolves are certain kinds of things defined as outpatient surgery, and I’m learning, to my dismay–and going a whole year in dismal, chronic pain and a great difficulty walking–that it can be interpreted in almost freeform style by the insurer, with no prior information available to me. Awesome!!

  22. 22
    Casey says:

    Hi David, would you consider doing a post on Medicare supplemental insurance? My hubby qualifies for Medicare in a couple months, and I don’t know what we need to add – or if it’s better to save $ to pay personal cost portion of straight Medicare. And Medicare advantage…..

  23. 23
    lowtechcyclist says:

    @eclare:

    @Earl: I do not get insurance through the ACA, I have employer provided health insurance, and my deductible is around $6,000. Nothing gets paid until I pay that. As a result, I have not been to a doctor in years.

    If I’ve got my facts straight, the ACA requires that they pay for an annual physical, regardless of the deductible. At least, that started being a feature of my employer-based insurance after the ACA passed. So look into that, OK? Because if you can get that free physical, you should.

  24. 24
    wmd says:

    @satby:
    Absolutely it is part of my compensation – it’s part of it that is similar to other companies I’ve worked for and I appreciate it. Back in 2000 I had a PPO, and my employer allowed me to cover my opposite sex domestic partner and her children on my policy – this proved vital as her son had a brain stem glioma and the coverage took care of his treatment at Lucille Packard – the children’s hospital at Stanford. My treatment is also at Stanford – and the pathology from my cancer says that I’m likely to be cured – HPV+ carcinoma in non tobacco users has over 90% NED at 5 years. I’ve got 7 weeks of radiation and chemotherapy – PET/CT 3 months later will verify it is gone and I’ll just have some follow up appointments afterwards.

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