Maxim in comments earlier this week asked a great question:
I have a friend in Florida who had an ACA Silver policy this year, and she says it was uniformly awful — “the kind of silver that turns your finger green,” as she put it.
I couldn’t remember if you’d ever made any comments specific to the Florida market and how to choose a policy. I do remember you saying to check every year rather than just renewing the existing policy (in any location), because there’s a good chance your current policy will no longer be the best one. …
Is there anything I can tell her to help her reduce the chances of having an awful policy next year?
This is a great question. And there is not a great answer.
We know from the Medicare Part D literature that people are really bad at picking health insurance in the first year. We also know from that same literature that people get pretty good in a few years. There is a lot of learning by doing and reacting against bad experiences among a population (mostly 65+) that uses their insurance a lot.
The big problem in the ACA is that there is not a lot of opportunity for learning by doing as the median enrollee has about a year of coverage so one or two opportunities to make a choice.
The big thing is that this is messy. I wrote in 2022:
Health insurance is complicated and complex so go get help
Navigators are government funded helpers who can’t make a specific recommendation but can help reduce complexity
Agents and brokers can make specific recommendations but they work on commission/premium while they are only required to give good advice not optimal advice.
Take your time
Open Enrollment goes through at least December 15th for all markets and through January 15 for Healthcare.gov
Be ready to accept good enough instead of perfect.
Look around and actively choose
Looking around and actively choosing is the most important advice I can give every year. The ACA’s use of price linked subsidies combined with the non-stickiness of the marginal enrollees means that every year insurers aggressively compete to offer very low premium plans. This means that a plan in Year 1 that is a great deal may be a really bad deal in Year 2 for an individual who is mostly buying on price. Sometimes this happens even if the same insurer offers the cheapest plan in both years. Looking around and making an active choice minimizes price surprises.
People should figure out what they value and how they think about trade-offs. Are premiums way more important than network? Or vice versa? Which docs and hospitals do you absolutely need to have versus those that you’re okay switching away from? Is a big deductible scary or a reasonable risk? These are the type of questions you need to ask and answer.
Agents are a big deal and we think that they are becoming increasingly important. In Florida, everyone should ask their agent if they are a “captive” agent which means they are contractually obligated to only show a single insurer’s offerings.
