I hate annual enrollment

Last updated on: October 25, 2016 at 8:26 am by Jane the Actuary

I hate annual enrollment 2016-10-21T07:14:51-06:00 Jane the Actuary

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It’s been stressing me out for the past couple of days, and especially today: no, not the election. Annual enrollment.

(Note, I’m writing this up and scheduling the post, just to make it a smidge less clear who my employer is, that is, in case a colleague happens by coincidence to read this blog and say, “hey, our open enrollment ended today — is Jane actually . . . ?”)

It’s a mess.

It used to be so much easier.

We started out with an HMO. I was perfectly happy to choose a doctor from a list, since we were new in town and had really no idea about anything. Sure, we had to drive half an hour to the hospital where my second son was born because the practice group my OB was in, no longer was linked to the hospital half a mile away, but that was fine — after all, that meant paying a $10 copay, and not a dime more (well, except for the extra cost for the private room charges). And when my son needed speech therapy, that was again a matter of a copay, until one day the office said, “Mrs. A, we found out you don’t need to pay the copays after all, so here’s your refund.” The best part was, it was actually the cheapest of the options.

Now, to be sure, there was a brief period where, after my second child was born but before we moved to Germany, where the usual OB/GYN practice no longer participated in the HMO at all, and I had to find a name of another doctor who did, who I saw for one visit, but that was fine. I’m very consumery — I don’t feel the need to have a deep personal connection to my doctor. Then we went to Germany, paradise of cheap healthcare, and paid for everything with a PPO where the pain of coinsurance was mitigated substantially by how stinkin’ cheap everything was.

And our return to the U.S. pretty much coincided with the advent of the high-deductible plans — which were from the start priced such that the combination of the premiums and the deductibles for the various plans meant that, even if we met the deductible ever year, we were still better off paying the premiums for the high-deductible plan plus the deductible, too, rather than the much higher premiums for the lower-deductible plan.

But for the last couple years, there’s a new wrinkle: the “private exchange.” Which is a real mess.

Sure, the idea is that a consulting company manages healthcare plans for a number of employers, and each employer’s employees go onto a website where they can choose among a number of health insurers, with more choice than they’d otherwise see, and with the employer paying a fixed amount per coverage tier. Employers and employees are both supposed to save money.

But it’s not working. Every year, the insurer recalculates its cost, and every year the comparatively cheaper plan you chose the prior year ends up with premiums that are way out of whack, and you have to switch to another plan to have reasonable costs. I can only imagine, if it’s that chaotic for the employees, always switching providers, it’d be a real mess for the insurers. And it’s not clear to me to what extent the costs are the same for every employer, or whether the insurer calculates the claims experience, and the cost, for each employer separately, so that maybe there’s a giant musical chairs game going on. Which shouldn’t be happening — there ought to be some benefits realized by keeping a stable group of customers, so that you can take active measures to manage their long-term health needs.

So you look at this set of price tags, and you’re stuck trying to figure out: why are the prices so different? What are the hidden differences between the plans? Sure, you can look up your doctors (though this is tricky, since sometimes they’re listed by practice name, and sometimes only by the names of the individual doctors, and, in one instance, my kids’ pediatrician, I thought it was odd that she wasn’t listed and called the insurer directly to find out she actually was in-network after all), but there’s nothing that really tells you how large the network is, in a quantified sense. If I need a doctor and we’re out of town, how difficult a time will we have finding one? If we’re in the ER, how likely is the doctor on staff to be in-network?

Likewise, I can look up existing medications easily enough. But what about unanticipated future healthcare needs? If I’m prescribed a medicine, is it likely to be on the formulary? How large is the formulary, anyway?

And for all plan types, what do the negotiated discounts look like? That’s key, when you’ve got a high deductible since whether 50% or only 40% of the sticker price is eliminated with the negotiated rate makes a huge difference.

Same with dental — and today I had the visit with the orthodontist where he said, “your kid’s ready to start braces now.” Which plan has the best negotiated rates?

Now, as it happened, I had said the other day that I was freaked out, and decided to go with the larger-network plan even though it was more expensive. I did some more digging today and concluded that maybe the alternate plan was not narrower, and that I had gotten incorrect information from my prior call to the call center, but I’m still a bit nervous and keeping my fingers crossed, and promising myself to get those check-ups done sooner than later, just in case.

But when I think about how much more we pay, for how much less in benefits, and how much stress there is around the constant switching of insurers, it’s very discouraging that even the “experts” who set up this Private Exchange concept can’t seem to get this right.

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