Like everyone I know who is a health policy junkie, I have been very excited about the launch of the health insurance exchanges. But my excitement is not just because of my professional interest—wanting to see how the exchanges actually work and how health care changes as a result—it is also for personal reasons. My 27-year-old goddaughter had to leave her parents’ policy after she turned 26 and purchase expensive—and pretty limited coverage—in the individual health insurance market. We have been looking forward to the new products, hoping they will give her more choices at better rates.
My goddaughter is exactly who everyone who cares about the success of the Affordable Care Act hopes will enroll. She is young, healthy and uses very little medical care. She knows that she should have coverage in case of a catastrophic event and she has some family history that inclines her that way. And, even though she uses very little medical care, she does care a lot about one thing: prescription drugs.
I went onto the Michigan Health Insurance Marketplace the day it opened to look for coverage for her. And, yes, I experienced all of the problems that have been widely covered in the press. It took me forever to get on. I started the application multiple times and it didn’t always save things or work smoothly or let me get to the finish before crashing. And, she has some unique circumstances that the application doesn’t clearly address. That is, she is a University of Michigan law student and has no income now, but will start a job in September 2014 that will give her a nice income (and, employer-sponsored health coverage). And, she is in Michigan now but will be moving to St. Louis in May. So, how do coverage and tax credits work in her case?
But the challenges of enrolling are not what I found most interesting about the experience (they eventually sorted themselves out by Saturday afternoon—maybe because everyone but me was watching the Michigan-Minnesota football game instead of going on healthcare.gov). Rather, what was most interesting to me was what tipped the balance for her to get health insurance on the exchange.
As we dug into the plans offered in the exchange (using some excellent health plan-sponsored websites in addition to healthcare.gov), we quickly realized that many of the plans offered in Washtenaw County have limited provider networks—HMOs or something similar. These would work fine for her while she is in Ann Arbor but starting in May, when she moves to St. Louis, it would make care more complicated. That left the Blue Cross Blue Shield of Michigan bronze, silver, gold and catastrophic plans because their PPO network provides coverage out of state as well as in Michigan. But, these plans all require that a deductible be met before prescription drug coverage kicks in.
The gold plan had the lowest deductible but the highest premium. For gold coverage, she would pay about $3,500 a year without a tax credit. After we realized how much gold coverage would cost, we actually did discuss whether it was really worth her getting coverage at all. After all, she is low risk and would only have a gap in coverage of about nine months and the penalty for not having coverage in 2014 is pretty small. And then we remembered something crucial: the drug she really cares about is a contraceptive. And, contraceptives are considered preventive benefits under the Affordable Care Act and must be provided with no cost-sharing. That means that she can get coverage under a bronze plan for about $2,200 a year with a high deductible but still get the drugs that mean the most to her at no cost. Her coverage will be comparable to what she has now but will cost her less than she is currently paying (even if she doesn’t get a tax credit) and give her a broader choice of providers.
While there has been much focus on the controversy around requiring contraceptives to be covered as a preventive benefit, there has been no focus on the important role they play in making health insurance coverage attractive to young women. And in the end, that part of the law may prove crucial to tipping the balance for young people like my goddaughter to get covered under the Affordable Care Act. And getting young people into coverage will, indeed, help to make health care coverage more affordable for those who need it the most.