Here in Massachusetts, we've had Romneycare available to us for the past several years. The state operation that runs it is called the Massachusetts Health Connector. Obamacare is based on Romneycare, but has a number of differences, including very different definitions of the standard plans. So today Health Connector 2.0 was rolled out. The two systems are running side by side, the old one effective until January, the new one selling plans that take effect then. Thus it's possible to compare the prices under Romneycare with the prices and offerings under Obamacare.
The executive summary is that Romneycare tended to have better plans, with smaller out of pocket risks, but Obamacare has brought more players into the exchange. So it lowers the cost to getting at least minimal insurance. And having any insurance is a lot better than having none.
Also bear in mind that Obamacare is not for big groups, only individuals and some small groups. Most group rates are probably lower than exchange rates. Romneycare functioned largely as a high-risk pool, with fairly high rates for those who had no place else to go. So Obamacare may not be the lowest rate you can find, if you can be part of an employer group.
Let's look at some details under the orange fleur-de-Kos.
Massachusetts has had an individual mandate for several years, so our coverage rate is very high. Being essentially a member of an insurance plan is important because it give you an agent to deal with the insane medical care system. Hospitals nowadays use a list price scheme called chargemaster. These prices are outrageously high, typically 3-4 times what any insurance company pays, and 5-10 times what Medicare pays -- which still covers actual costs. Chargemaster is the sucker rate. It applies to the uninsured who show up and don't or can't negotiate down. It is almost instant bankruptcy for any normal person. But it lets the hospital claim a huge dollar figure for the amount of charity or uninsured care they give.
How bad is chargemaster? Our community hospital mis-coded a family member's insurance card and the insurance company, not seeing a valid ID, rejected it. So the hospital billed about $4000 for a 3-hour emergency room visit. Once the insurance was applied, the insurance company rate was about $1300. Our deductible and co-pay were based on that. So having insurance that negotiates rates with providers is potentially worth more, in dollar terms, than their payments. So you really don't want to be stuck with chargemaster. Even the crappiest Obamacare plan probably gives you realistic rates somewhere.
Now the biggest differences, overall, between Obamacare benefits and Romneycare benefits appear to be these:
- Obamacare has much higher out-of-pocket annual maximums. For a family, it's usually $12,700 bronze, $10,000 gold, and $3000 platinum. Romneycare was $10,000 bronze, $4000 silver, and nothing but fixed copays gold. So your risk is higher than it would have been under Romneycare.
- Obamacare's Gold is more like Romneycare's Bronze; Romneycare's Gold was costlier and probably better than Obamacare's Platinum. So the scale is centered differently. Obamacare Bronze is well below the minimum coverage that Romneycare allowed.
- Romneycare plans are more standarized. Silver low is silver low. There are some "other" plans, but they're the exception. The Obamacare plans have more minor variations in deductibles, co-pays, etc., so they're harder to compare on price.
On the other hand, Obamacare has brought more players into the exchange, and competition does seem to be helping lower costs. The new low-end Bronze plan can at least get you out of chargemaster for a relatively low price, though you'll probably end up paying most of your bills yourself, and you're covered for catastrophic events.
Romneycare offers me 60 plans, all from non-profit HMOs. Obamacare offers me 93 plans, adding some for-profit newcomers. Here's something to be careful about. How many providers, including yours, are in-network? Romneycare has a lot of "limited network" plans, where a big HMO only covers a small fraction of their own providers. Obamacare has a few of those, but the newbies to town seem to have miniscule provider lists. So you can get a really cheap "Ambetter" insurance plan from Centene Corp., a St. Louis-based commercial operation, but I don't know of any doctors who accept it, and they don't make it easy to find one. Minuteman, a local nonprofit, is also pretty cheap and also seems to have very, very few providers. The established HMOs deal with all of the major hospitals, and doctor groups accept them.
So I tried to find a real-world plan and compare the two versions. So let's start with Tufts Health Plan, a leading HMO, and pick a plan with a mid-range $1000/2000 deductible. No "co-insurance" on hospitalization, though -- given how much that costs, 35% co-insurance can very, very quickly add up to five figures (even those high out-of-pocket caps). Hmmm, Silver Low:
No deductible for visits to the doctor.
No seperate Prescription Drug deductible.
Prescription copays are lower for most generics, higher for most brand-name drugs.
deductible: $1,000 (ind.) $2,000 (fam.)
out of pocket cap: $2,000 (ind.) $4,000 (fam.)
office visit: $20 copay
generic Rx: $15 copay
ER visit: annual deductible, then $100 copay
hospitalization: annual deductible, then no copay
So for two middle-aged adults (married), the monthly rate would be:
Tufts Commonwealth Advantage HMO 1000 $1,772.73
BTW the lowest Silver Low was $1422, but that was centered on one hospital (Boston Medical Center) nowhere near us, with its own limited provider network.
Now that is not cheap; today's small business group rates are a bit better than that. (The delta has been shrinking.) But this is Boston, where medical care is ridiculously expensive.
Now over to the Obamacare "v2.0" web site. What's the closest plan?
in the Gold section:
Tufts Health PlanCommonwealth Advantage HMO 1000 v.2
Deductible: same as v1
Out of pocket cap: much higher than v1
office visit: annual deductible, then $30 copay higher than v1
hospital stay: annual deductible, then $45 copay higher than v1
generic Rx: annual deductible, then $20 copay higher than v1
Rate: $1,636.62 / mo
So they renamed the plan, adjusted it to Obamacare's skimpier coverage, and lowered the price a bit. The out of pocket cap is the killer. Go the other direction, and you're in the Platinum range (remember, this is closer to "silver low" in Romneycare):
Tufts Health PlanCommonwealth Advantage HMO 500
Deductible: lower, as it's platinum
Cap: lower by 25%
Office visit: annual deductible, then $20 copay
Hospitalization: annual deductible, then $35 copay
Generic Rx: annual deductible, then $15 copay
Monthly rate: $1,841.62 / mo
Platinum plans range from around $1300 to over $2000. The cheap ones have the tiny networks centered around one hospital or a small group. The higher-end ones are what most HMOs here were like a decade ago.
For the record, here's the low end of the price range:
BMC HealthNet Plan Bronze A
$648.48 / mo
OV: annual deductible, then $50 copay
Hosp: annual deductible, then $75 copay
Rx: annual deductible, then $30 copay
This plan is tied to Boston Medical Center, with negligible suburban coverage. But it's useful for inner-city residents who are near BMC (formed by merging Boston City Hospital with BU Medical Center).
So overall, you can't get exactly the same coverage as before, but prices are comparable -- better coverage costs more, worse coverage costs less. I'm disappointed that Obamacare features such high out of pocket costs. That kind of risk-sharing is what insurance is supposed to prevent. Do other countries have such high risk sharing? I think it's based on a false belief that most Americans are malingerers or Munchhausen sufferers who abuse medical care because they like it. Somehow that still pervades the ACA. While I would like it to be fixed some day, I am not optimistic, as the big push now is to reduce cost, and as you can see, it still isn't cheap.