Shopping for a Policy
5:25 pm
Tue October 8, 2013

Explainer - Colorado Health Exchange

If you thought the debate over health care reform was complicated to follow the shopping experience for health insurance may be equally hard to understand.  First of all the prices people will encounter vary.  Aspen Public Radio's Roger Adams went shopping for policies on the Colorado Health Exchange - Connect For Health Colorado.

“The health care reform law brings new benefits to consumers but also new costs.  The impact that those new costs are going to have on consumers depend on a variety of factors including the type of coverage omeone has today, where they live, their age, gender and income.”

That’s Robert Zirkelbach.  He is a spokesman for American Health Insurance Plans a trade group representing insurance companies.  We asked him to help us as we went shopping on Colorado’s new health exchange, Connect For Health Colorado.  Before we start it should be understood that Zirkelbach’s trade group did not support the Affordable Care Act in its final form.  We also reached out to Connect For Health Colorado officials and to Colorado’s State Division of Insurance.

“My name is Myung Kim and I’m Director of Communications and Outreach for Connect For Health Colorado.”

"Vince Plymell, I’m the Communications Manager for the division of Insurance part of the Colorado Department of Regulatory Agencies.”

We logged on and went shopping on the health exchange.  The policy requests we put in were for a single male aged 55 and a married woman with a baby aged 33.  Let’s start with her.

“Starting next year the reform law imposes a number of new changes to health insurance including guaranteed coverage, meaning everybody who applies for a policy is offered one.  Pre-existing conditions will be covered and premiums will no longer vary based on a person’s health status or medical history.”

Our female customer and her husband’s only real question is do they earn too much for federal assistance.  They do.  On the exchange website, using the “Find A Plan” search function the least expensive policy was $966 a month with a ten thousand dollar deductible.  That’s using the zip code for Basalt.

“Geography is one of those things that does impact the cost of health care.  Utilization patterns are different in different places.  There’s a matter of supply and demand in terms of doctors, providers, hospitals and within Colorado there are eleven rating areas.”

If we use the Ft. Collins zip code the monthly premium drops by half with the same ten thousand dollar deductible.  In Colorado Springs the premium is $490 and in Denver $446.    

When our 55-year-old single male hit the Find A Plan button the cheapest policy living in Basalt was $735 a month with a deductible of five thousand dollars.  Like our female customer his premiums dropped by more than half in Ft. Collins and Denver.

“The good news about that is that consumers are going to be getting policies that all have a comprehensive set of benefits.   What we’re seeing is a wide range of prices and in fact many very competitive prices but it depends on where you live and we do know in the mountain communities that those prices are generally more expensive and they have been.”

To compare we also went to a commercial online insurance finder called eHealth.  The story was much the same there for our two shoppers with one interesting discovery.  We had a choice of buying a policy now or one that starts in January, that’s when Obamacare will fully go into effect and the policies will be more comprehensive and could cost more. 

What also changes is accessibility.  With the new income requirements it also makes insurance affordable for thousands of currently uninsured Colorado residents.

Another change is the information required to sign up for coverage from any company.  There are no health related questions.  One only needs to provide an age and a location.  What’s also new is the online shopping experience.  Again insurance industry spokesman Robert Zirkelbach.

“The idea of creating exchanges and providing one stop shopping for consumers so they can see all the options available to them is a good idea and the more we can simplify the process for consumers the better off they’ll be and the better off their health care system will be.”

A recent column in Forbes magazine calls the online searches at health exchanges the big game changer.  It is like what Expedia did for the travel industry the magazine writes.  Online sites like Expedia, Orbitz, Kayak and others now populate the travel industry along with rating sites like Yelp and Urban Spoon.  The same appears headed for the health insurance industry.  With more customers coming into the system under Obamacare and new online tools for shopping prices the hope, says Colorado Division of Insurance spokesman Vince Plymell, is that prices will come down across the board.

“That is pure speculation and something we don’t like to engage in.  That is the hope or the intent of the ACA is to at least bend the cost curve and at least maybe slow down some cost increases and maybe the cost of health insurance but whether it will or not, we can’t say.”

So, its an open question whether the result of all this change will be an insurance policy for a middle class 55 year old that one day is less than $735 a month in Basalt Colorado.