Cost Conscious: Lessons from Kaiser's health insurance analysis

Jordan Rau from Kaiser Health News did the unthinkable this week. He posited that health insurance premiums might sometimes be too low.

He visited Chattanooga, Tenn., to explore the consequences – good and bad – of living in a place with very low health insurance premiums. Here are three tips from his piece from The Atlantic, titled “When Is Health Insurance Too Affordable?”

Understand the market. In February, Kaiser and NPR ran a piece by Rau that examined health insurance markets around the country. They identified the 10 regions that offer the lowest prices for what is known as the “silver plan” under the Affordable Care Act’s health insurance marketplace. Chattanooga is among the cheapest of those 10. And, to bring that point to life, Rau found a patient named Angela Allen, who had been suffering from two slipped discs in her back and had struggled to find a doctor to treat her. He wrote:

At $187 a month, Allen’s policy is cheaper than almost any other midlevel, or silver, plan in the nation. Just a few miles across the Georgia border in Catoosa County, a similar plan would cost someone Allen’s age $348 – 86 percent more.

Tie prices to costs. The temptation when writing about health insurance is to focus on the low cost to the consumer as being the overriding goal, a good unto itself. But health insurance costs often are directly tied to the health of the population, the same way car insurance costs are tied to driving histories in a particular area. This can be true at a macro level and a micro level. If you stop smoking and prove it to your insurance company, for example, your insurance rates can go down. Rau is one of the best health reporters in the business, and he never writes about health insurance in a vacuum.  He wrote:

Low premiums here are striking because residents of Hamilton County, where Chattanooga is located, are more likely to be obese, smoke and suffer from hypertension than average, according to the Institute for Health Metrics and Evaluation, a Seattle-based research center. Yet premiums here are comparable to some of the nation’s healthiest regions: Minneapolis, Salt Lake City, and Honolulu, where less demand for medical services allows for the nation’s least costly policies.

Break through the bureaucratic barriers. One repeated frustration voiced in coverage of the Affordable Care Act has been the confusing set of options and terms among different plans,  in part a byproduct of legislation that went through so many iterations and political fighting before finally becoming a law.

Rau zeroes in on one particularly baffling piece of nomenclature: the one-letter names given to plans. He wrote:

Andy Figlestahler, an insurance broker in nearby Cleveland, Tennessee, said many people buying policies did not understand that some plans gave them a restricted roster of providers. BlueCross labelled the narrow network policies with an “E.” The two-hospital network plans were identified with an “S” and policies with all three systems had a “P.”

Yes, all three letters together spell ESP. You can forgive the most paranoid of your anti-government friends out there for thinking that Obamacare is an attempt to read their minds. If a reporter in every state just broke down what the different names of the different plans mean, it would be a huge public service.

If you have great examples, please share them with me. You can send them to askantidote [at] gmail.com.

Photo by nateClicks via Flickr.