Individual Health Insurance Plans: Too Many Options, Too Little Guidance

Millions of Americans need help to determine what health insurance they should buy.

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Each year U.S. News, like most sizable enterprises, offers its employees various options for health insurance coverage. This past fall my wife and I, with the usual uncertainty and trepidation, selected one. We hope we chose wisely. 

But we had it easy compared with the roughly 33 million Americans who can't get group health coverage and aren't eligible for public coverage through Medicaid and Medicare. They must either go without coverage (otherwise referred to as going bare) or shop for one of the commercial health plans marketed directly to individuals. Since employers aren't picking up part of the cost, the size of the monthly premium will have a lot to say about the coverage these individuals and their families can afford. Perhaps it's not surprising that at least half of them go without.

The good news for most of these people is that they have lots of plans to choose from. The bad news is that they have LOTS of plans to choose from. Go to Plan Finder, the federal government's one-stop shop at www.healthcare.gov for individual and small-business health insurance that was created as part of the Affordable Care Act, and you'll find an average of more than 1,200 plans per state. (Individual health insurance is marketed and controlled at the state level.) Each plan has its own mind-numbing matrix of costs, covered services, and limitations. 

When I tried out Plan Finder and started by entering my age, ZIP code, and some basic family information, a note popped up: "This site organizes and presents information collected from insurers to help you better understand your options. It does not recommend specific plans." I clicked on the "show me the plans" tab and was rewarded with a list of 68 plans along with options for sorting them. I could have filtered by monthly premium, deductible, and "in-network, out-of-pocket" limit, among other things.

But the caveat was true to its words. I came away without a recommendation. I was almost as puzzled as I was when I started, with no real sense of which plan to choose. Nor do other web sites provide such guidance.

Our goal in the coming months is for U.S. News to make the chore much faster and simpler—to help consumers quickly sort through individual plans and gravitate towards those that make the most sense for them and for their families based on cost, coverage and quality. We recognize that bringing clarity to the individual health insurance marketplace will be a challenge, and that's putting it mildly.

To make it happen, we need an algorithm, a quantitative way to evaluate health insurance plans. Any such evaluation has to incorporate decisions about which variables to include and the weight to assign to each, based on its relevance to consumers.

Do we simply try to filter plans by how much they cost and what they cover? Do we give plans more points if they offer broader coverage for preventive services, like annual check-ups and mammograms? What's the best way to evaluate plan quality and value? We're actively weighing the pros and cons of different approaches. Knowledgeable industry insiders have applauded our intent but could not chart a clear course.

We're proceeding regardless. An effective, easy-to-use tool would benefit millions of people. A study by the Commonwealth Fund found that nearly three-quarters of those who try to buy individual coverage fail. Many people can't afford the high premiums. Others can't find a plan that fits their needs. Still others are turned down because of a pre-existing illness, a common cause for rejection that is scheduled to become illegal on Jan. 1, 2014, under the Affordable Care Act. Maybe some of those people, too, would have better luck if they knew where to look.

We'd welcome guidance from those among you who know something about these questions. We have our own ideas, but, of course, we don't know what we don't know. That's where you come in. Help us, and you can make a real impact on those millions of lives.