Exchange Health Plans Are Cheaper?

The Affordable Care Act promised us exchange health plans will be cheaper, but have we been told the truth?

According to a recent survey by Pricewaterhouse Coopers that consumers who purchase a health plan on the exchange, are getting a pretty good deal – a better deal than employer based coverage – or so the survey says.
PcW also reports that, “the median 2014 premium for an exchange plan with coverage similar to that of the average employer-sponsored plan was $5,844, and the cost on the exchange for the cheapest equivalent plan was $4,885.”

But before you dump your group health plan and send all your employees packing to the exchanges to purchase health insurance, you need to consider one very important factor; doctor and hospital networks are very limited on the exchange programs. So I ask you this question, “what good is a health plan if you don’t have a doctor that takes it?”

I think consumers are being blinded by going for cheap price and I perfectly understand. After years and years of double digit increases to their health insurance plans, seeing a health plan that is cheaper must be a breath of fresh air to consumers.  But I think you need to be really careful before you cancel your group health plan and go for an exchange plan.

As brokers, we hear the horror stories about misleading exchange programs almost on a daily basis from our clients and friends. In fact one client forwarded us a letter the other day she received from one of the more prominent medical groups in Westchester County, detailing a certain exchange insurance company (name withheld) that is telling their enrollee’s this medical group accepts their insurance plan. The letter to their patients clearly points out that this particular insurance company is not in their network and no future plans are being made to partner with them.

I’m sure this was quite an eye opening experience for many employers and employees that cancelled their traditional group health plan and opted for the cheaper, exchange health plan. Needless to say these people were too fast on the “trigger” and misled by the stories, like this one from PcW that boasts exchange health plans are a better deal that traditional health plans.

My suggestion would be, if you like your health plan – keep it, if you can.