What It's Like to Apply for Obamacare on State and Federal Health Care Exchanges

It's been two weeks since the state and federally run health insurance exchanges have been open, and news surrounding their effectiveness has been mixed. Under the Patient Protection and Affordable Care Act, known better as Obamacare, every individual is required by law to have health insurance by Jan. 1, 2014, or face a penalty that's set to increase every year through 2016. This means that whether you're ready to sign up for health insurance or dreading it, it's time to start navigating the exchanges.

That's why, in an effort to get opinions from backgrounds and locations across the country, we three Motley Fool contractors -- Sean Williams (that's me), Steve Symington, and Travis Hoium -- bring you a firsthand account of our experience on exchanges in three different states. Here are the successes and failures we've encountered, so you can see how this might affect you and possibly your portfolio.

Sean's take
I haven't been looking forward to the beginning of October for years now. In a previous Obamacare article, I looked at some reasons why uninsured young adults hadn't purchased health insurance before, and for many it was an objection solely based on price. For me, I'm with the 11% who responded with a feeling of invincibility. However, with the Patient Protection and Affordable Care Act now a law, it was no longer a matter of choice.

Unlike some of my colleagues, I had no trouble accessing my state's (Washington) health exchange. I'd heard about how server overloads and architectural design flaws are holding up the 36 federally run exchanges, but the majority of state-run exchanges are being executed almost flawlessly. The one caveat, though, is that many people are still on the outside looking in rather than being ready to buy insurance, since they have two-and-a-half months to go before their coverage (and the individual mandate) would kick in.

I decided to be brave and enroll completely, knowing that glitches were common and that I'd previously done little research on my state's plans. The result was unbelievable success.

The longest part of the process was identity confirmation, but it worked relatively well. The only potential stumbling block I noticed was that you got into the actual identification application before you were asked if you read and speak English. This seems a bit far into the process for non-English-speaking U.S. citizens to go before being given the option of alternative languages. It also speaks to the delays announced this month from the Department of Health and Human Services, which operates the federally run site, that Spanish-speaking enrollment won't commence for a few weeks. 

I had 36 plans to choose from in my county, although surprisingly none were at the platinum level. My price for these plans ranged as low as $191 to as much as $405, putting Washington a bit below the national average compared to estimates issued last month that the average silver-priced plan was $328. For certain people, coverage is key -- for me it was mostly about price because I don't frequent doctors often.

Being 33 years old and qualifying for no subsidies (the perfect high medical cost offsetting candidate that will make Obamacare a success), I decided to go with a bronze level plan from Coordinated Health, a venture created by Centene (NYSE: CNC  ) , which typically deals in lower-priced insurance plans and makes a killing on signing up government-sponsored members under Medicaid. Do I think the plan is fair? I could have purchased a less inclusive plan last year for at least 30% less than I'm paying a month now, but given the beefed-up minimum benefits under the new plans, I understand why the price has moved higher.

So as of Oct. 9, 2013, I am signed up to receive health insurance coverage for the first time in my life. Let's see how well the insurance exchanges held up in a few other states...

Steve's take 
The Affordable Care Act is well outside my investing wheelhouse, but in no way does that make its launch any less applicable to my money.

I live in Montana, one of 36 states that chose to default to the new federal health exchange system in lieu of running their own. I'm also a relatively healthy 30-year-old who as a contract writer for Fool.com isn't eligible for health insurance under my employer.

In short, people like me represent the demographic Obamacare absolutely needs to have sign up for its insurance plans to succeed.

Then again, I already have health insurance that meets Obamacare's requirements. But I can't say I'm pleased with the stiff monthly premium and uncomfortably high deductible that comes with my current family plan.

In addition, when I signed up for the coverage in early 2013, I was mildly frustrated with the process of filling out multiple applications and digesting dozens of rate quotes. As a result, I was excited to take advantage of the relative transparency said to come with the new Healthcare.gov web portal.

So over to the site I went, only to watch this message continually refresh for a full 32 minutes:


Source: Author's screenshot of Healthcare.gov.

So, for half an hour, I waited until the site finally directed me to the login page, where I began to complete the form to create my account.

That was, at least, until I reached the "Security Questions" page, on which I was greeted with three blank, unusable drop-down fields preventing me from going any further. Naturally, I refreshed the page hoping it would fix the problem, only to be sent right back to the "Please wait" dialog above.

Sigh.

I suppose it's not any particular surprise. After all, nearly everyone expected some glitches in the process of rolling out a universal, one-stop marketplace for tens of millions of legally obliged Americans to shop for health insurance.

Do these issues make the Healthcare.gov efforts look a little silly? Sure.

Does that make Obamacare an automatic failure? Absolutely not.

After all, open enrollment for the new 2014 plans runs for six more months through March 31, 2014. What's more, even if you do opt for new coverage through the site now, it won't kick in until Jan. 1. That gives the government plenty of time to work out the kinks, so you can bet I won't be alone in revisiting the site in the near future to see what it has to offer.

Travis' take
Like Sean and Steve, I'm a prime candidate for Obamacare. As a healthy 31-year-old who doesn't smoke and doesn't qualify for subsidized premiums, I fall into the demographic that will likely see the biggest increase in cost associated with new plans. The good news for me is that I live in Minnesota, which has the lowest-cost plans in the country.

Unlike Steve, I'll be using a state-run exchange and have been getting updates for months from the MNsure.org website about what to expect and even ballpark costs. The process wasn't seamless but worked, and it has a chance to be a huge leap forward from the old process of obtaining insurance.

The first thing investors and consumers need to understand is that buying insurance as an individual is nothing like getting it from an employer. There's no nice pamphlet with five or six plans to choose from or a simple sign-up form that you get reminders about at the end of the year. Buying individual care until the exchanges was a hodgepodge of websites, brokers, difficult-to-understand plans, and no great way to compare plans that were often apples and oranges.

The big leap forward to me for people buying individual plans this year is a standard coverage form called a "Summary of Benefits and Coverage." This single seven- or eight-page document covers what you pay for everything from a regular doctor's visit to what happens when you're pregnant. I tried to find a similar document for my current Medica plan and found a fraction of the information on a plan summary document. If nothing else, this standardized document will make it extremely easy to compare plans and costs in the future.

Getting into MNsure.org was easy enough and getting quotes for plans was pretty much painless (outside of small technical glitches in filtering). In total, I could choose from 66 plans from five insurers for anywhere from $104.58 to $253.37 per month. There were 23 bronze, 24 silver, 14 gold, and five platinum plans with a various networks, deductibles, and levels of coverage.

Compared to my current plan, I found the costs to be higher, but all of the plans are more encompassing, which shouldn't be a surprise since Medica already told me that my current plan doesn't meet Obamacare requirements for 2014.

 

Current Plan

Lowest Cost Silver Plan

Lowest Cost Gold Plan

Lowest Cost Platinum Plan

Provider

Medica

PreferredOne

PreferredOne

PreferredOne

Monthly Premium

$134.83

$139.58

$162.95

$174.03

Deductible

$3,300

$3,500

$2,000

$1,000

Maximum Coverage

$5 million

No limit

No limit

No limit

Primary Care

$30 copay

0% coinsurance

$35 copay

$35 copay

Prescription Generic Drug Cost

$5

0% coinsurance

$10 copay

$10 copay

Emergency Room Copay

$200 copay

0% coinsurance

0% coinsurance

0% coinsurance

Source: MNSure.org.

The big thing that was lacking early in the process was the ability to search for plans that would cover a certain doctor or hospital. This information was available by going to an insurer's website, but it wasn't easy to find. This is an important function for consumers because networks have gotten smaller and even very regional, which will impact costs as consumers pick plans.

I will note that UnitedHealth Group, a company that has gotten a lot of attention for not participating in many exchanges, was an option for me through its subsidiary Medica. This shouldn't be a shock since Minnesota is where United HealthCare is headquartered, but it shows that the company is available in some states. I'll also note that Medica was often one of the lowest-cost options for me.

The first few days of Minnesota's exchange weren't flawless, but they show a lot of promise for those who have to buy individual coverage. Many insurers are participating, information about plans is readily available, it's easy to access the system, and in my case costs don't appear to be abnormally high. In my opinion, that's an improvement from blindly picking plans from the first website that pops up when I Google "health insurance" even if the system isn't perfect yet.

The takeaway
I (Sean) would say there are some clearly defined takeaways from our experiences. Perhaps none is more apparent than the differences between state and federally run exchanges. Many state exchanges are working well after the first two weeks while the federally run exchanges, which are serving 36 states, are something of a work in progress. That bodes well for architects of state-run exchanges like Xerox, which helped build the groundwork for Nevada's exchange, and poorly for CGI Group, which is the contractor behind the federally run Healthcare.gov build-out; the company has had no comment on the "hiccups" thus far.

Health care access is another differentiating factor I'm seeing across the country -- and even between Steve and myself. In less-populated states, coverage costs are considerably higher because a person's access to health care is more limited. In bigger cities and counties, costs are much lower. Travis and I live relatively close to a major metropolitan city, which helps lower our premium costs. In addition, Travis and I are also seeing more competition among insurers since we're in a more populated county than Steve, helping to further lower our costs.

The final takeaway here would be that insurers are in for some short-term disappointment if they operate in federally run exchange states. Insurers like WellPoint (NYSE: WLP  ) and CIGNA (NYSE: CI  ) , which spent a fortune to purchase competing insurers Amerigroup and Healthspring, are seeing only a fraction of the sign-ups they expected because of the federal exchange delays. This isn't to say these people won't eventually sign up, but the big boost that insurers were expecting this quarter may get pushed into next quarter. 

Obamacare questions? We have the answers!
Still in the dark about how Obamacare might affect you and your portfolio? Don't worry -- you're not alone. To help prepare investors for the massive changes coming to the American health care system, The Motley Fool created a special free report that makes this complex topic easily understandable. Download "Everything You Need to Know About Obamacare" and discover how the law may impact your taxes, health insurance, and investments. Click here for your free copy today.


Read/Post Comments (29) | Recommend This Article (17)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 14, 2013, at 7:36 PM, Enonymous wrote:

    There is a health dimension beyond that which is known to man. It is a dimension as vast as space and as timeless as infinity. It is the middle ground between light and shadow, between riches and poverty, and it lies between the pit of man's fears and the summit of his knowledge. This is the dimension of disaster. It is an area which we call ObamaCare.

  • Report this Comment On October 15, 2013, at 1:35 AM, johncharw wrote:

    I strongly disagree with the government requiring a citizen to buy this kind of insurance. Will we soon be required to trade in our "guns" on an "electric car" made in "China"? I also disagree with the Supreme Court legislating from the bench and calling this expense a "tax", so that the Chief Justice could get around the "commerce" clause and rule Obamacare "constitutional" law. Our first Chief Justice, John Marshal, was turning over in his grave that day!

    Our country is starting to sound like Germany in the late 1930s. Wake up America!!!

  • Report this Comment On October 15, 2013, at 12:34 PM, HectorLemans wrote:

    ^ I think you meant to say "Wake up sheeple!!!" Seriously libertarians, can you be any more stereotypical?

  • Report this Comment On October 15, 2013, at 12:37 PM, TMFHousel wrote:

    <<Will we soon be required to trade in our "guns" on an "electric car" made in "China"? >>

    No.

  • Report this Comment On October 15, 2013, at 12:43 PM, Mega wrote:

    johncharw

    With your political opinions and $3 you can buy a cup of coffee. Perhaps if you add your legal opinions and $2 they will throw in a pastry.

  • Report this Comment On October 15, 2013, at 12:56 PM, keaheyl wrote:

    Why sould the president, vp, house, senate and other government workers be exempt from Obamacare?

  • Report this Comment On October 15, 2013, at 1:06 PM, TMFHousel wrote:

    keaheyl,

    They're not exempt. They are, in fact, explicitly required to use it.

    Here's what the law says:

    "the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are — (I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act (or an amendment made by this Act)."

    http://www.politifact.com/truth-o-meter/statements/2013/aug/...

  • Report this Comment On October 15, 2013, at 1:49 PM, mdk0611 wrote:

    Here's one experience that seems to be missing from this discussion: "If you like your plan you can keep your plan". Like 800,000 other individual Horizon Blue Cross/Blue Shield of New Jersey policy holders (and I'm sure millions of other BC/BC subscribers across the nation) I received a letter a few weeks ago informing me that under the provisions of the ACA my policy can not be renewed at the next anniversary date. In my case that's next July.

    Can someone explain that to me in light of "If you like your plan you can keep your plan" ???

  • Report this Comment On October 15, 2013, at 2:39 PM, TMFFlushDraw wrote:

    @mdk0611

    You'll likely be pointed to a qualifying plan that Horizon Blue Cross/Blue Shield of New Jersey offers. That's what happened with my Medica plan in Minnesota. I got a similar letter a month or so ago and then last week I got a letter with the plan they will automatically sign me up for if I don't cancel.

    The truth is that your plan likely changes slightly every year anyway, you just don't have to go to the hassle of making a change or moving to a new provider. At the very least, it's worth checking out what's offered on the exchanges (if they're up and running for you). I was fairly surprised at the low deductibles and comparable premiums I was offered.

    Hope that helps,

    Travis Hoium

  • Report this Comment On October 15, 2013, at 2:49 PM, TMFSymington wrote:

    @mdk0611

    To elaborate on Travis' comment, I also recently received a letter from my current provider letting me know I won't be required to make any changes since my current plan qualifies.

    That said, my current insurance company isn't on the list of providers participating in the healthcare.gov system, so I still plan on going in to see what everybody else has to offer. If there's nothing better, I'll sign up for it. If not, I'll stick with what I have.

    In any case, certainly doesn't hurt to check it out to find a plan you know is approved..

    Cheers,

    Steve Symington

  • Report this Comment On October 15, 2013, at 3:03 PM, mdk0611 wrote:

    Thanks gents -

    New Jersey is part of the federal exchange and newspaper reports have stated that there were major hassles the first week with respect to signing up and even access to the website. As I can stay on my current plan for another 9 months I'm going to let the dust settle and the bugs be cleared before I do any exploring.

  • Report this Comment On October 15, 2013, at 4:14 PM, TMFUltraLong wrote:

    mdk0611,

    Probably has more to do with the beefed up benefit standards under Obamacare. When the plan was outlined there were 10 specific minimum benefits that needed to be met by insurance companies, of which, about half of last year's health plans in this country simply didn't meet. There's a pretty good chance that yours fell under that premise.

    Sean

  • Report this Comment On October 15, 2013, at 6:59 PM, cmalek wrote:

    Since when is Motley Fool an outlet for government propaganda?!

    Any law that strove for universal coverage would have automatically enrolled everybody without anybody having to specifically sign up.

  • Report this Comment On October 16, 2013, at 10:14 AM, NewbieNate wrote:

    Cmalek., it's still a privatized system. It is just mandated that you insure yourself just like you are mandated to have car insurance unless you live in Virginia where you can pay a fine not to have car insurance similar to paying the opt out fine in the Affordable Healthcare Act.

  • Report this Comment On October 16, 2013, at 1:29 PM, broknrekord3 wrote:

    Hogwash, the GOP promised me there would be hellfire upon these cursed days!

  • Report this Comment On October 16, 2013, at 1:29 PM, RichardinReno wrote:

    Sean Williams... from what I can deduct from your experience, you are going from being uninsured to an Obamacare policy next year at a price of ~$190 at a minimum.

    Why not just stay uninsured and pay the ~$90 penalty?

  • Report this Comment On October 16, 2013, at 1:38 PM, AkaThePerfessor wrote:

    I sure wish every such article like this would point out right at the top that this whole Obamacare health exchange process is only for a FRACTION of the population--the 10-20% of people who don't have employer-provided insurance and aren't already on government insurance, such as medicare or VA.

    We're talking independent consultants, the self-employed, adult students, the unemployed, the poor, and early retirees who aren't getting retirement health care from work and are too young for medicare. Plus folks who have high-school-quality jobs that don't offer employer health care.

  • Report this Comment On October 16, 2013, at 1:42 PM, TMFUltraLong wrote:

    RichardinReno,

    The penalty is the *greater* of $95 or 1% of your household income in 2014 and it's only going to rise through 2016. For me, there wasn't much difference in the cost between the penalty and the coverage, so I figured I might as well get the coverage. Plus, being a contractor with the Motley Fool I'm able to write off certain health care premiums on my taxes since I'm a 1099. It was all around better for me this way.

    Sean

  • Report this Comment On October 16, 2013, at 3:16 PM, deckdawg wrote:

    Sean, I'm certainly no fan of Obamacare, but I am relieved to see that you are going to purchase health insurance. I can assure you that you are not invincible. Young people get cancer, MS, break their fool necks, etc. I'm especially relieved for your parents, grandparents, or other family who would have likely felt obligated to deplete thier retirement savings trying to pay for your medical care. (Or, maybe even driven into some sort of Walter White scenario. Would you want to see your dad cooking meth?).

    Doug (A concerned parent)

  • Report this Comment On October 16, 2013, at 4:18 PM, TMFUltraLong wrote:

    deckdawg,

    I'm the one in the family that does the saving =)

    Sean

  • Report this Comment On October 16, 2013, at 4:22 PM, riffraff2008 wrote:

    I'm glad to hear those of you that could sign up are so happy with your Obamacare. How are the deductibles? I would just like to know why my health care premiums have gone up over $100 per month each of the past 2 years. Here I thought it was going to be "more affordable" for everyone. This program fits well with the current administration's overall plan of income redistribution. Also, why are some groups exempt?? This law is not fair and needs to be repealed ASAP!

  • Report this Comment On October 16, 2013, at 4:52 PM, hbofbyu wrote:

    Being that nothing comes from nothing, and the health care pie is still the same size as it's always been (same doctors, same hospitals, same insurance companies) - someone has to pay. And I don't think it will be the hospitals, the doctors or the lawyers - and certainly not the insurance companies (didn't they basically write the thing?). So who pays for all this additional coverage along with the billions in added infrastructure to manage this thing?

    1. People ages 18-35 (welcome to your new tax).

    2. Everyone else who has a company plan as we see double the percentage rise in premiums that we saw last year.

    3. Deficit spending (your children).

  • Report this Comment On October 16, 2013, at 5:00 PM, riffraff2008 wrote:

    Well put hbofbyu, you hit the nail right on the head.

  • Report this Comment On October 16, 2013, at 11:55 PM, fellowAmerican wrote:

    hbofbyu & riffraff2008 .. I support your "Freedom" to go without insurance but not at my expense! I suggest you look into how much the uninsured add to everyone's costs. So unless you want to rewrite US Law and allow hospitals to deny care until after a credit check I suggest a nominal fee is "Fair and Just". Also, let's not forget Obamacare is essentially Nixon/Heritage/Dole/Romneycare ... this approach is a GOP think tank baby and the individual mandate is a GOP "self accountability" idea. Vermont doesn't have the individual mandate and does just fine. So, just like "death & taxes"; Hospital visits are one of the few iron clad guarantees in this life.

    As for point #2. - I'd rather my rates only double than quadruple, which is what my "employer" based insurance rates have done here in California. Things got really bad thanks to "free market" based deregulations that led to a 400+% consolidation of the Health Insurance Industry here in California since 1999. Cheaper rates, ha!

    .. as for #3) When do you think America was at its best?? I mean the best as YOU see it by your own parameters... now go google "history of top marginal tax rates" and find the year you had in mind. Where are we now? Maybe that's why our elders didn't leave us the deficits you're so fearful of passing on. I definitely know it's a fact the United States of America never cut taxes in time of war until 2003.

  • Report this Comment On October 18, 2013, at 2:35 PM, KevinWayne wrote:

    It seems to me that the problem is mainly A visit to the hospital is OMG expensive while the care is 17th rate. Since Obamacare promises more of the same rate increases without better care it's just business as usual with double digit increases in cost next year. AGAIN!

    For those of you interested in History. No Country has ever escaped it's Socialist Government until after the World has quit loaning it money.

  • Report this Comment On October 18, 2013, at 2:56 PM, normnospam wrote:

    I'm a retired Teamster in Calif. I'm was lucky to be able to retire after 35 years, and still be halfway healthy at 60 years old. I now have to pay for my ppo insurance, but it has no Rx plan, so I pay out of pocket $3000 a year for my wife's meds. The covered ca plans are half the price and include Rx co-pays. Is the Affordable Health care Act perfect? No. Have the Republicans done anything but say "don't get sick?'. No. So when you have a better plan, have it vetted in Congress.

    Be part of the solution.

    And unlike some of the posters who hide behind screen names, I posted my mine in the LA Times

    See my Oct 15, A14 letter to the editor

    Norm Wilkinson

    Whittier, CA

  • Report this Comment On October 19, 2013, at 12:07 PM, MacZen wrote:

    Just to add to the misconception that Congress is exempt from the ACA (they're not): http://finance.yahoo.com/blogs/the-exchange/congressional-ex...

  • Report this Comment On October 20, 2013, at 9:19 AM, obamatheman wrote:

    I can tell from the writers "Halcyon Days" of signing up for the ACA who they voted for in the last election. And to Norm, the ACA charges more to the younger subscribers so old farts like you pay less. Good for you.

  • Report this Comment On October 20, 2013, at 9:08 PM, flymicco1 wrote:

    My newest quote on the obamacare insurance is over $9,200 a year. It was about $6,000 for a comparable plan with a $5,000 deductible. I was in a group plan which was cancelled as of Dec. 31 with the new obamacare. I've carried insurance for myself through our association's group plan for 20 years. I've been self-employed for all but 2 of those years. No, the younger workers are not subsidizing me.

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