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The Dose - JK Wall

Welcome to The Dose, which tackles the finances behind local health care and life sciences and points to the most interesting national analysis. Your host is J.K. Wall.

Health Care & Life Sciences / Life Science & Biotech

Obamacare exchange 2.0: Anthem far from the cheapest plan

November 10, 2014

Starting today, we can all window shop the 2015 Obamacare plans, which will go on sale on Saturday on HealthCare.gov.

So I did exactly that, taking a look at the plans available in Marion County. I shopped for a fairly typical family for Indiana: two parents aged 35 and 32, two kids aged 4 and 0, household income of $70,000, which is exactly average for Hoosier households with two working-age adults.

I shopped for plans using the exact same information back in January, when the 2014 Obamacare plans were on sale.

This time, I found a dizzying 68 plans to choose from, with different deductibles, terms for sharing the cost of doctors' visits, ER visits, prescription drugs and different providers who I could see.

The differences, which I’ll get into below, are stark and could lead to quite different outcomes in the marketplace this year.

However, let me make a disclaimer upfront: My search is for Marion County only; there are different health plans with different pricing in other counties around Indiana. Also, I searched for what I regard as an average family—but the plans and prices offered will be quite different for families of different ages, number of members and income levels.

So regard this post as illustrative, not comprehensive.

And now to the differences.

First, the tax credits are less attractive. When I shopped in 2014, my average family would have qualified for a tax credit of $467 per month. But in 2015, that tax credit will be 14 percent lower.

(These credits declined because in 2015, new insurers entered the market offering lower prices. If that makes no sense to you, go here and here to understand the upside-down way the Obamacare exchanges work.)

The other big difference is that, whereas last year Anthem Blue Cross and Blue Shield offered the cheapest plans, Anthem this year is nowhere near the cheapest.

In fact, on my search, Anthem offered the eighth-cheapest plan.

And by comparison with the cheapest plan, it didn’t seem cheap at all. In total premium, it was $93 per month, or 13 percent, more expensive than the cheapest plan.

Factoring in the estimated $402 tax credit the average family I used would qualify for, the Anthem plan was 29 percent more expensive.

That is quite a swing in positions for Anthem, which has said ad infinitum that price will be king among exchange shoppers. And it proved it last year by claiming two out of every three enrollees in the Obamacare exchange plans.

So which insurer is the cheapest? Ohio-based CareSource. Its cheapest plan was $721 per month, or, for my average family, $319 per month after tax credit.

CareSource apparently took to heart Anthem's insight that, on the exchanges, price is king.

“In the individual market, it’s all price, price, price,” Scott Streator, CareSource’s vice president of enterprise strategy, told me this summer. “People told us, ‘We’re willing to switch providers, if you give us affordable coverage.’”

CareSource is offering an HMO product that will limit the number of health care providers involved. Its provider network will not include the Community Health Network, St. Vincent Health or Franciscan Alliance hospital systems.

Significantly, however, CareSource signed up the Indiana University Health hospitals to be in its network—even though IU Health is not part of Anthem’s exchange plan provider network. Anthem also excludes from its exchange plans the Franciscan hospitals (except in Crawfordsville and Lafayette) as well as the St. Vincent hospitals.

Both Anthem and CareSource will include most of the Suburban Health Organization hospital in their networks, which means Hendricks Regional Health, Hancock Regional Hospital, Johnson Memorial Hospital, Major Hospital, Riverview Health and Witham Health Services.

The second-, fourth-, fifth-, sixth- and seventh-cheapest plans are offered by Managed Health Services, an HMO operated out of Indianapolis but owned by St. Louis-based Centene Corp. MHS is offering plans under the Ambetter brand name.

According to the provider directory on its website, MHS’ Ambetter plans will offer Community Health Network’s providers, as well as most of Suburban Health Organization's. The directory does not list any St. Vincent, Franciscan or IU Health providers.

MDwise doesn’t show up in my listing of health plans until the 21st-cheapest plan. Its premiums, without subsidy, are $184 per month, or 26 percent, more expensive than CareSource’s. With subsidy, the cheapest MDwise plan is 58 percent more expensive than the cheapest CareSource plan.

That could be significant for MDwise, because the group performed surprisingly well against Anthem last year—even without paying any commissions to insurance brokers—in large part because it was the main plan on the exchanges offering access to IU Health, St. Vincent and Franciscan hospitals.

But now, with CareSource, there is another way to get access to IU Health without buying a MDwise plan.

Minnesota-based UnitedHealthcare, the largest health insurer in the nation, shows up with the 23rd-cheapest plan—$221 per month, or 31 percent more expensive than the CareSource plan. With the tax credit for the average family, the UnitedHealthcare plan would cost 70 percent more than the cheapest CareSource plan.

UnitedHealthcare, however, will offer all the major providers—just as its health plans sold to employers do.

What does all this mean? Who knows? But it at least means this: The ground is far from settled in the age of Obamacare, and it will take a couple of years before we get a clear picture of this new marketplace.

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