New Obamacare feature dupes consumers with miscalculated plan prices
Posted By Brendan Bordelon On 1:56 PM 10/24/2013
The new “See Plans Now” feature on HealthCare.gov, created as one of President Obama’s “improvements” to a site plagued by technical flaws, seriously underestimates the cost of insurance for most users.
The Obama administration rolled out the new application on Sunday following weeks of complaints from site visitors, who were unable to create an account and therefore could not view or compare health-care plans.
“Americans across the country can type in their ZIP code and shop and browse, and see what the options are that are out there available to them to comparison-shop and begin to make decisions,” White House press secretary Jay Carney explained on Tuesday.
But CBS News reports that the projected costs are disingenuous, almost always ending up significantly less than what consumers will eventually pay.
Jonathan Wu, an industry analyst, told CBS the feature is “incredibly misleading for people that are trying to get a sense of what they’re paying.”
“See Plans Now” separates consumers into two groups, those under 49 years of age and those 50 and over. But the application bases all answers for the younger group on what a 27-year-old is likely to pay, while the older group is based on the average 50-year-old. And in both groups, actual insurance costs run significantly higher than the government’s estimate.
The Daily Caller News Foundation compared HealthCare.gov’s monthly cost estimate of the CoventryOne Bronze Deductible Only plan for a 48-year-old man from Miami, Fla., with the actual estimate on CoventryOne’s website. While HealthCare.gov puts the price at $162 per month, CoventryOne pegs it at $258, nearly $100 higher.
The jump is even more pronounced for a 64-year-old Miami man. The same plan is priced at $277 on HealthCare.gov but leaps to $475 on CoventryOne’s website, a whopping 70 percent increase.
Unlike HealthCare.gov, most price calculations on insurance websites require customers to provide a date of birth and answer questions on tobacco usage.
The Wall Street Journal reported earlier this month that the Health and Human Services Department (HHS) initially delayed a tool allowing users to browse plans before registering, worrying that consumers eligible for federal subsidies would be turned off by artificially-high prices.
That led some, such as Manhattan Institute scholar Avik Roy, to question whether the Obama administration was deliberately deflating prices to make sure enough healthy consumers paid into the system.
“HHS bureaucrats knew [preventing pre-registration browsing] would make the website run more slowly,” he wrote in Forbes. “But they were more afraid that letting people see the underlying cost of Obamacare’s insurance plans would scare people away.”
“Obamacare wasn’t designed to help healthy people with average incomes get health insurance,” he continued. “It was designed to force those people to pay more for coverage, in order to subsidize insurance for people with incomes near the poverty line, and those with chronic or costly medical conditions.”
The “See Plans Now” feature on HealthCare.gov warns users that “most people who apply will pay lower monthly premiums than those shown here,” but nowhere explains that these prices may end up significantly higher.