Is picking a health plan that hard? It appears so

I designed, managed and communicated health plans for many decades. there is no question in my mind that most people have the wrong plan to minimize their risk and keep their overall costs as low as possible.

Don’t feel bad though, even PhDs, including Paul Krugman say choosing a health plan is too confusing. Check out the article linked below from the New York Times.

It’s Not Just You: Picking a Health Insurance Plan Is Really Hard

There are several reasons most people find it so hard to choose a health plan, and often the wrong plan.

  • Too many choices available
  • Unrealistic fear of high health care bills leading to overinsuring
  • The belief they will always have to meet their high deductibles
  • The desire to not pay anything out-of-pocket for health care
  • The idea that a higher cost plan is the best plan
  • Not balancing fixed spending (premiums) with possible spending (health care)
  • Fear of making the wrong choice
  • Not reading or paying attention to communications about the plans available
  • Assuming the plan in force now will be the best plan in the future
  • Networks, participating, non-participating, etc.

There is no escape, private, government and employer plans are all too complicated.

One comment

  1. I would like to offer one more reason to the list.

    I think it also has to do with knowing the rules and the games that the insurance companies play. Since I don’t have new medical issues every month, my learning curve takes years on what is covered, what is not covered, and how the insurance company treats each case. I know that under my current medical HMO insurance all my drugs are covered. If I switch to a high deductible, one of my drugs was not covered at all for a cost of $10k/yr. I was tipped off to double check my drug coverage before switching to a high deductible. It would have been a 12-month mistake. My company plan information calls my current coverage an HMO but BC/BS calls it an EPO which is a big difference in the rules. Over the years I have learned to get my issues resolved usually within one phone call. I have learned which urgent centers I can go to without bleeding all over the place figuring out if they take my insurance. Insurance is supposed to take out the uncertainty of financial risk, not cause more uncertainty and stress. (Financial risk does not equal free.)

    Auto, life, and homeowner’s insurance policies are very clear with what the deductibles are and what is and is not covered. For auto and homeowner’s insurance, usually it is not what is damaged but what caused the damage to determine if an event is covered. Extended warranties just care about which part is broken. I don’t think I have a policy longer than a dozen pages.

    Health insurance is another story. The two-page summaries of what is covered are very generic and often tells you to call the insurance company to verify coverage. There are approximately 10,000 CPT codes currently in uses to bill for medical procedures and I bet each one has its only book of what each insurance plan will or will not cover and to what percentage. You know that it is an issue when it takes several minutes to look up a procedure on a computer when you call your insurance company. Being overly simplistic, it should be that I am broke and I will only pay X dollars to fix me and preventive maintenance will cost me Y dollars per year.

    Yes, I realize that it is a very complex issue, but I offer this as an explanation of how some people are parallelized to indecision. The same problem happens with 401Ks and IRAs. Too many choices, too complex and the result is people rather do nothing than make a bad decision. Or in my case, I stick with what I know. Every year, I look, do some research, and then decide that that I going to stick with my plan. There is nobody that I can ask because no two people have the exact same medical conditions, family members, or plans.

    Like

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