Using Health Care Reform to Compare Plans

Health insurance reform has helped making an “apples-to-apples” comparison between health plans much easier. Anyone who has ever tried to buy health insurance as an individual knows it is just not as simple as purchasing other goods and services.  It is easy to compare a Delta flight to New York to a United flight to New York based on price, when both start and end at the same destination.  Both come with a seat, and these days — if you are lucky — probably a soft drink and maybe even some peanuts.

The trick in purchasing health coverage is that it is very difficult to make apples-to-apples comparisons between plans, especially just based on price.  The plan with a cheap monthly premium may actually have a much higher deductible—and end up being much more expensive in the long term.  Two plans may look very similar and be comparably priced; but one may cover maternity care, while the other does not. That can be tough, especially for the consumer who only learns this after she becomes pregnant.

For many years consumer advocates have urged policymakers to come up a system to make it easier for consumers to comparison shop based on the cost of a plan, and the benefits that it includes.

In 2008 the California HealthCare Foundation even developed a prototype “label” for insurance products that would allow consumers to compare plans to one another, the way one can compare foods using a nutrition label.

Fortunately, another benefit of the new health care reform law is that it will set up a system that allows consumers to comparison shop based on price and benefits.  For people purchasing insurance on their own in the new “exchange,” four “levels” of plans will be available (easily remembered by their names, platinum, gold, silver and bronze).  Platinum level plans—the most expensive—will also cover 90 percent of consumers expected health care costs.  Bronze plans will have cheaper premiums—but expect to pay more out of the pocket in co-pays and or deductibles.

The new health insurance exchange will allow you to make apples-to-apples comparisons between health insurance plans. Moreover, plans will all cover a defined set of benefits—including prescription drugs, hospitalization, maternity care and mental health among others.  These more comprehensive plans will be slightly more expensive than many available on the market now.  But on the flip side, consumers won’t be left suprised– and uncovered–when they discover their plan does not cover a service they need.