Low premiums may mean high out-of-pocket health costs

WASHINGTON – If you buy one of the less expensive insurance plans sold through the Affordable Care Act's marketplaces, you may be in for a surprise: Some plans won't not pay for doctor visits before you meet your annual deductible, which could be thousands of dollars.

"This could be the next shoe to drop, as people don't realize that if they're buying a bronze plan, they may have to pay $5,000 out of pocket before it contributes a penny," Carl McDonald, senior analyst with Citi Investment Research, said at a conference last month in Washington.

Experts say some new enrollees will be discouraged from seeing doctors if they have to pay the full charge, rather than simply a copayment. In Miami, for example, 40 percent of bronze plans require consumers to pay the full deductible before coverage kicks in, according to an analysis by online broker eHealthinsurance.com, a private online marketplace, for Kaiser Health News. The average deductible among the examined bronze plans in Miami is $5,735.

Patients in those plans who haven't yet met their annual deductibles would have to pay the full cost of the visits, unless they were for preventive services mandated by the law. A typical office visit can run $65 to $85, while more complex visits may cost more.

People who buy their own insurance have always had to pay a set annual sum, called a deductible, before policies begin paying their claims. But first-time insurance buyers may not realize they're on the hook for those costs before benefits kick in, and might choose plans based solely on the monthly premiums.

Bronze and silver plans, which have the lowest monthly premiums but typically some of the highest deductibles, are the most likely to require consumers to spend that amount themselves before the insurer pays any claims.

There's no nationwide data on how many plans do that. But in seven major cities, including Miami, half of bronze plans, on average, require policyholders to meet the deductibles before insurers will help with the cost of doctor visits, the eHealthinsurance-Kaiser Health News analysis found.

Silver plans, which generally have higher monthly premiums than bronze, are more generous, with more than three-quarters paying for doctor visits before the deductibles are met. The analysis included most or all of the plans available through the health law marketplaces in Atlanta, Philadelphia, Dallas, Tampa-St. Petersburg, Fla., Miami, Chicago and Phoenix.

In Florida, 90 percent of silver plans offered in Tampa and 89 percent in Miami allowed coverage for at least some doctor visits before the deductibles were met.

Meeting the deductible before most coverage kicks in is common in the individual market, but it differs sharply from job-based health insurance. More than three-fourths of the insurance plans offered to Americans with coverage through their jobs pay a substantial chunk of the cost of doctor visits without the workers having to meet the annual deductible first, according to an annual survey of employers by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

Under the law, Congress granted insurers leeway in how they design their plans, so long as bronze plans cover at least 60 percent of the costs of a typical policyholder, silver plans cover 70 percent, gold plans cover 80 percent and platinum plans cover 90 percent – with consumers on the hook for the remainder. Gold and platinum plans weren't included in the eHealthinsurance-Kaiser Health News analysis because they generally cover more services with less cost-sharing by consumers.

All new plans must cover some defined preventive services with no copayment by the consumer and without having to meet the deductible first. Those include some vaccinations, mammograms and other cancer screenings, contraception – including birth control pills – and periodic physicals. But prevention services don't include treatment for an illness, such as the flu. Charges also might apply if, during a preventive care visit, the patient also is treated for a medical condition or a minor injury. In addition to doctor visits and preventive care, some plans may offer limited coverage for some prescription drugs.

So policyholders get some coverage simply by paying their monthly premiums. But "consumers need to look closely at plan design," said Nancy Metcalf, senior program editor at Consumer Reports. "If you have someone without a lot of money and they have a $4,000 or $6,000 deductible before anything (beyond preventive services) is covered, I have concerns about access to care."

Plans that list prices for doctor visits followed by the phrase "after the deductible is met" mean that consumers must pay the full deductible before getting doctor visits for small copayments. Additional information may be found by clicking the "details" button and reading the summary of benefits. Consumers also may call insurers directly or look up the information under the policy names on insurers' websites.

Sixty-four percent of bronze plans offered in Dallas require policyholders to meet the full deductible before coverage kicks in, according to the analysis, which included all insurers except Molina Healthcare. The average deductible in those plans was $5,400, according to the data insurers provided to eHealthinsurance.

In Philadelphia, by contrast, 33 percent of bronze plans require policyholders to pay the deductible first, the smallest percentage among the cities studied. The average bronze deductible there was $5,689.

Among silver plans, the analysis showed that far more provide some coverage before the deductible is paid. Of 14 plans examined in Chicago, for example, only one required the deductible to be fully met before the consumer could see a primary care doctor for a small copayment. All but one insurer, Land of Lincoln Mutual, were included in that analysis.

Cigna spokesman Joe Mondy said the insurer sought to offer consumers a range of choices. Some of Cigna's plans, for example, allow in-network visits with primary care doctors before the deductible is met, typically for a $30 to $45 copayment, while others do not.

"We structured the plans with the recognition that a lot of the new customers have never had a primary care or family doctor," Mondy said. Plans that allow primary care visits for small copayments are expected to foster doctor-patient relationships, he said.

Under the law, there are special provisions for lower-income Americans who purchase silver plans but not bronze plans. People who earn less than 250 percent of the poverty level – about $28,700 for an individual – will get extra help from the federal government in the form of lower copayments for doctor visits and smaller annual deductibles. For the lowest-income residents, that can mean plans with little or no deductibles and copayments as small as $3 for primary-care doctor visits.

"Be very careful before you take a bronze plan over a silver plan" if you are in the subsidy-eligible income range, said Linda Blumberg, a senior fellow at the Urban Institute, a social and economic research center. Those who earn less than twice the federal poverty level, about $23,000 a year for an individual, get the most help, with subsidies ratcheting down sharply after that.

Consumer advocates say shoppers should consider a wide range of plans – and not assume that the ones with the lowest monthly premiums are the best for them. Still, finding out what services – other than preventive care – are covered before the deductible is met can take some digging.

Generally, any plan that can be linked with a "health savings account" – a way to put money aside tax-free to cover medical costs – won't cover much except preventive care before the deductible is met because of the rules governing those accounts. For all other plans, consumers can check insurers' websites for details or log on to HealthCare.gov, the federal marketplace that covers residents of 36 states. A new feature added to HealthCare.gov shows each policy's monthly premium, annual deductible and the copayments required for doctor visits, drugs and emergency room care.

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(Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization that isn't affiliated with Kaiser Permanente.)

Distributed by MCT Information Services