This is really not a new problem. Even agents that have been selling health insurance for decades understand the new plans are confusing. The SBC's - Summary of Benefit and Coverage statements created by the government are as clear as mud! Agents have been fielding calls for years about deductibles, coinsurance, co-payments, and this 'maximum out of pocket' concept. Now add to this all the new rules under the New ACA - Affordable Care Act - law, and you have a boatload of people with a boatload of questions, trying to get answers. So what do they do? Call the marketplace? Call the "Navigator" - a local office funded with government money who had NO prior background in insurance and was trained for a few hours? Call your agent? ...of yes, that's an option! I love that the government and media never mention this as an option: Let me call a government office, an insurance company who has average wait times from 20- 50 minutes, or a local agent who I can talk to and will return my call and help me....
The reality is INSURANCE IS CONFUSING. Even if you understand your plan, there has been a ton of problems with enrollments, and they are not all on the government sites. Insurance companies had to conform to a little rule in the healthcare law called the MLR - Medical Loss Ratio - that kicked in beginning in 2011. The law states that insurances companies selling individual health plans (and small groups products as well) must pay out 80 cents of every dollar they collect or refund the money. That means they have 20 cents of every dollar for ALL EXPENSES: overhead, salaries, processing claims, paying agents a commission, and keeping something for themselves - a little thing called profit. What most people don't know is that pre- ACA, most large national carriers were paying out between 69-80% of the money they collected in claims. What the law did was force them to pay out more AND in turn, they were FORCED to cut expenses. So what happened?
The immediate fall out came with large carriers exiting the marketplace: Guardian and Principal announced in the fall of 2010 they would no longer sell health insurance (and many, many small carriers followed suit.) Secondly, insurance companies cut commissions to agents, cut staff, and cut other expenses, anything they could to save money. What most people don't realize is that the 'big bad insurance companies' did and will continue to make a profit. An insider at Blue Cross of IL tells me their annual profit has always been in the single digits - 3-5%. So now, with less staff, insurance companies are trying to field thousands of calls. So what happens - it takes you a LONG TIME to talk to a live person and get an answer. A large provider in our state decided to change the credit card vendor they used for their online application to cut expenses. Result: error messages and no one can pay with a credit card; currently they are also having problems with the monthly bank draft option. (FYI, commissions to agents were cut about 60%, so many agents are leaving the health insurance business or looking to sell other products, and those who 'dabbled in healthcare' are going in other directions.)
So people are confused and frustrated. The new plans are not cheap and many have large deductibles. And with less staff at insurance companies (and local, government agencies running out of federal funds), who will help people understand their plans? You can read more about all the problems in this article, but there is no solutions:
Here's a solution: Call a good, local agent for help in answering your questions!