HealthPocket Offers a Partial Workaround for Healthcare.gov Mess
As thousands of Americans struggle to sign up for health insurance on the overloaded government exchange set up under the Affordable Care Act, two Bay area companies are offering their own free Web platforms as easier places to shop around.
Both HealthPocket of Sunnyvale, CA, and HealthSherpa in San Francisco provide one-click access to a snapshot of the plans available in each US region. One of the many complaints about the government site, HealthCare.gov, was the requirement that consumers enter extensive personal data before they could see any plan data and get a sense of the cost range. The two user-friendly private sites have been drawing visitors and press coverage, while the debut of the government marketplaces has been clouded by criticism of government stumbles. But HealthPocket CEO Bruce Telkamp says his company’s online consumer guide has only been possible because of something government officials did right.
The government has been making details about the coverage terms of health insurance plans accessible through public databases and other means, he says. This provides an opening for private industry to download the information, and possibly augment the services that government agencies provide.
“The data’s newly available,” Telkamp says. HealthPocket’s goal is to post it all as part of an independent, transparent marketplace that will force health plans to compete based on price, value, and the quality of care in their networks of physicians and hospitals, he says.
“That level of competition has never really been known in the health insurance context,” Telkamp says.
HealthPocket isn’t a perfect workaround for HealthCare.gov’s current problems. More insurance plan data still needs to be released, for example. But HealthPocket hopes to build a substantial business as an alternative, unbiased marketplace.
By tapping into the public databases, the three young programmers who recently launched HealthSherpa took only a few days to set it up, CNN reported.
Like the HealthPocket site, HealthSherpa shows a list of plans and monthly premiums after visitors type in as little as a zip code.
HealthPocket has built in more extensive features, such as explanations of health plan basics, information about plan deductibles and out-of-pocket costs to consumers, more selection criteria to narrow down personal plan choices, and a search option to find out which local doctors work with which plans. In addition to plans for individuals and their families, HealthPocket also shows Medicare and Medicaid plans, small business insurance plans, dental coverage, and short-term plans for people in transition.
Users don’t need to provide their names, and they can enter several consumer profiles to see how plan costs would vary for different individuals. For example, visitors can type in different ages, or regions of the country.
HealthPocket started gearing up for its launch more than a year ago, because the health industry veterans who founded it foresaw a niche for a for-profit technology company, particularly when Obamacare expands coverage to millions of Americans in early 2014. Telkamp says the company’s founders predicted a bumpy start for HealthCare.gov and the state marketplaces set up to implement Obamacare.
“We recognized that the government exchanges would have problems,” Telkamp says. “They likely wouldn’t be a good user experience.” Telkamp and his co-founder Sheldon Wang had been senior executives at eHealth, which pioneered online sales of health plans in 1997 through its unit eHealthInsurance.
Telkamp says the online brokerages that sell plans work with selected health insurance company partners, so they don’t display all the choices in the marketplace.
HealthPocket does not sell plans or sign people up. The company’s goal is to provide unbiased access to information about all available plans. The site provides a phone number to contact outside brokers or agents who can sign up customers.
“We just connect those buyers and sellers,” Telkamp says. Revenues for HealthPocket will come from brokers’ payments for these online referrals, as well as advertising, Telkamp says.
The company is not disclosing the total funds it has raised to date. “We’re well capitalized right now,” Telkamp says. HealthPocket has eleven full-time employees, several consultants, and a software development team in China.
Although most staffers are engineers, some are researchers who mine health care databases and consumer surveys for information. They issue reports on topics such as comparative rankings of health plans. The company aims to act as a “customer advocate and watchdog on behalf of consumers,” Telkamp says.
Although HealthPocket’s plan is to make its site as simple as possible, users will still have some terms to learn. Under the Affordable Care Act, health plans are classified according to the percentage of medical costs they pay. In general, Bronze plans have the lowest monthly premiums, but these plans pay only 60 percent of covered healthcare expenses. Premiums for Silver, Gold, and Platinum plans will usually cost more, but they pay for a higher percentage of covered services. HealthPocket shows the “Metal” classification of each plan.
HealthPocket also displays each plan’s deductible—the amount an insured person must spend on medical services each year before the health plan starts to kick in its share. However, certain preventive care services must be offered by all plans at no charge even if the patient hasn’t yet met the yearly deductible. These include immunizations, screening tests for conditions such as diabetes and high cholesterol, and mammography for women over 40.
To zero in on the best plan choices, individuals can enter their zip code, age, gender, and whether they use tobacco products. They can also identify any chronic conditions they have, such as asthma or diabetes. For plans in effect in 2013, HealthPocket gives each a “Personal Score” based on ratings from government agencies, non-profits, and HealthPocket’s own assessment of comparative financial value. However, this feature isn’t yet in place for 2014 plans, and details on some plans are not yet available. Telkamp says HealthPocket is temporarily limited by some of the snafus that are hampering HealthCare.gov. Full information on all plans has not yet been supplied by government health agencies.
“We show every bit of the data they’ve released so far,” Telkamp says.
Government officials have pledged to fix the problems on HealthCare.gov by the end of the month. In the meantime, HealthPocket visitors can do some “window shopping” and call some of the brokers or carriers to get more details, Telkamp says. Some people may decide to sign up directly, without going through a government exchange.
But signing up through an exchange is crucial for people who believe they may qualify for an income-based government subsidy that will reduce their monthly premiums or give them a tax credit.
Consumers can only receive the subsidy if they buy their insurance through HealthCare.gov, or one of the state exchanges in the states that operate their own marketplaces. In California, it’s Covered California at www.coveredca.com.
But as the December 31 deadline looms to buy coverage that starts Jan. 1, 2014, industry observers expect the government online exchanges and phone lines to be mobbed next month.
Telkamp says HealthPocket visitors who want the subsidy may find that a broker or carrier for the plan they’ve chosen is able to facilitate their signup through a government healthcare exchange.
The HealthPocket site provides basic information about the income levels that qualify individuals and families for the subsidy at various levels. In general, individuals qualify if their yearly income is $45,960 or less, and a family of four qualifies with an annual income of $94,200 or less. In some states, Medicaid will cover those with very low incomes.
Consumers must go to the government exchanges or other sources to calculate how much their own costs might be reduced by the subsidy. Healthcare.gov refers visitors to the Kaiser Family Foundation’s health care costs calculator to get an estimate before they enroll on a government exchange.
Telkamp predicts significant benefits for consumers as the transparent marketplaces for health insurance become established and the kinks are worked out. Consumers can re-evaluate their choices every year, he says. In their current plans, the doctors, drug formularies, and other factors may change over time.
“Every year the consumer should at least check the market to see if that plan is the best plan,” Telkamp says.
Open competition may slow the growth of health insurance costs, Telkamp says. But he’s not ready to say that HealthPocket could go a big step further and help those costs come down.
“I’d love to see that happen,” he says.
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