Asking everyday Americans to navigate health insurance is like asking passengers to fly the plane.
That’s really not much of an exaggeration. And chances are good that you can relate to the problem, whether you obtain your health insurance through an employer, through a broker, directly from an insurer or through one of the public exchanges created after the passage of the Affordable Care Act (commonly known as Obamacare).
Even an expert has trouble choosing the right health insurance plan. Health economist Austin Frakt has published a long article in the New York Times, detailing his inability to estimate the true cost of the plans offered by his federal employee program and the difficulties he faced in picking the proper plan.
Frakt points out some of the issues in his article. There’s a striking lack of transparency in health insurance pricing. It’s extremely difficult to compare exactly how much each plan will pay for various services without putting in hours of work. It’s just as hard to make side-by-side comparisons of which doctors participate in each plan, and their participation can change at any time. And there’s nowhere to easily figure out what the “real” cost of a medical visit will be.
Frakt’s prescription for the problem: using modern technology to make crucial information on health insurance offerings easily available online.
Here’s the good news. That prescription is already being filled, by private health insurance exchanges like Candor.
The Difficulties in Shopping For Health Insurance
This section may be old news for many readers, but we wanted to take a look at some of the problems that consumers face when trying to buy health insurance – because we’ll then see how private health insurance agencies are able to solve most of those problems.
- The prices quoted for plans aren’t the “real” prices:
- Comparing the “real” prices of different plans is nearly impossible:
- Insurance companies don’t make it easy:
- Other issues:
Your monthly premiums aren’t all that you pay for your health insurance. There are deductibles (the amount you have to pay out of pocket before insurance pays anything at all), co-insurance fees (the percentage you have to pay per doctor’s visit, no matter what), copayments (the fixed amounts you have to pay per visit), and out-of-pocket maximums (the total number of real dollars you have to spend before insurance covers everything).
All of those numbers are different for every plan, even the multiple plans offered by the same insurance company, and the numbers can change depending on what type of doctor you see. However, even if you manage to understand the percentages and limits, there’s still no easy way to simply figure out what you’ll have to pay if you break your leg or catch pneumonia. Just as frustrating, prescription coverage usually involves an entirely different set of numbers.
It can take hours of poring over documents (paper or online) just to estimate the “real” amount you’ll have to pay for health insurance under one plan. Comparing the numbers for several plans from different insurers can require repeated visits to multiple websites, setting up spreadsheets and taking voluminous notes. The task can take days. And online tools can’t do accurate side-by-side comparisons for one company’s plans, let alone plans from many different providers.
A Harvard study has found that most Americans aren’t completely sure what’s covered by their health insurance, for good reason. The average health plan document can be 10-20 pages long, it’s filled with jargon that’s hard to understand (do you really understand the difference between co-insurance and co-payments?), and online summaries are often set up so that you have to scroll through dozens of pages just to gather information for a single plan.
We haven’t even brought up the problems you face once you’ve purchased health insurance. Prices always go up and never down (and they’re already astronomical), customer service is usually terrible (at best), and making changes after a “life event” like a marriage or new baby is extremely difficult. Perhaps worst of all, plans aren’t “portable.” If you change jobs, lose a job or switch from a traditional job to self-employment, you can’t take your health insurance with you.
It’s no wonder that most Americans are confused by – and unhappy with – their health insurance, or that a large number of people experience “buyers’ remorse” after choosing a plan.
The Solution: Private Health Insurance Exchanges
A private health insurance exchange takes advantage of economies of scale to greatly benefit those shopping for insurance. It allows smaller companies and individuals to use their combined purchasing power to obtain better plan options, at better prices, than would be available otherwise. Just to make it clear, these private exchanges are very different than the public exchanges set up by states after the implementation of Obamacare, and are far superior.
Private health insurance exchanges have been around on relatively small scales since the 1980s. But today’s advanced technology has made them much more efficient, and in many cases like Candor’s private exchange, more accurate and a pleasure to use.
Here’s how many of the difficulties we’ve listed are mitigated or eliminated through a private health insurance exchange.
- A unified marketplace for health insurance plans:
- Better prices:
- Comparison tools:
- Plan portability:
- Exceptional customer service and communication:
Private exchanges are typically able to make many more choices available to participants. That’s because insurers are likely to offer larger number of plans to their more important partners, and the power of the exchange’s large customer base can be leveraged into a robust selection of insurance options. All of those plans are fully detailed on the exchange’s unified website so there’s no need to go shuttling around the web to every provider’s website.
The large, combined member base of a private health insurance exchange doesn’t just mean more choice. It also means lower prices than are generally available to the public, because providers will always offer their lowest costs when there’s a high volume of business to be written.
The advanced technology used by today’s private health insurance exchanges makes it possible to set up comprehensive comparison tools and cost estimators. Many of these tools can show you side-by-side displays of those nasty deductibles, co-pays and co-insurance charges, as well as readouts of “real” prices. Advanced private exchanges even offer “modeling” tools which can accurately estimate the true costs of real life events like a pregnancy or a sprained ankle, for each plan you’re considering.
As a customer purchasing health insurance through a private exchange, your “deal” is with the provider, no matter what your life or job situation. You can take your plan with you when you change employers, go to work for yourself or decide to take a sabbatical for that around-the-world trip you’ve always wanted, and still take your current health insurance with you.
Modern private health exchanges use something called blockchain technology, the same system that turned Bitcoin into a major currency. In essence, the technology digitally records all “transactions” and puts customers directly in communication with the insurance provider, while protecting privacy at the same time. That simplifies and enhances customer service interactions, provides necessary health details to insurers and doctors with a few keyboard clicks, and gives you instant access to your plan documents as well as all of your records. Blockchain makes the system vastly more efficient while eliminating many of the everyday frustrations experienced when trying to deal with an insurer.
If that sounds too good to be true, it’s not. High-end, modern private health insurance exchanges like Candor are already in full operation. They may not completely eliminate all of the hassles of buying health insurance; after all, you still do have to compare plans to make the right choice. But they’re a major step forward in turning the ordeal of shopping for a health plan into a normal, relatively simple process.
That’s a major step forward that anyone who’s ever bought health insurance can appreciate.