Consumers will not embrace health insurance exchanges

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September 19, 2013 by Tony Novak

Yesterday I had a conversation with an associate who works for a large private exchange. They have most of their system online, but are basically “treading water” until October 1 and when more carriers have their rates approved. He takes calls from consumers daily but most are just asking about what will be available for 2014. He told me about a phone call he took earlier yesterday from a machinist somewhere in the middle of the country. The caller was referred by one of my web sites and so that was why he was telling me the story. This machinist had heard about the possibility of an income tax penalty that he wants to avoid, and he knew that he should have health insurance coverage for his family. He was investigating to try to get a jump start on his health insurance planning. The guy was mid 50s earning about $41,000 and they calculated that he was likely to qualify for some amount of subsidy. They used an online calculator to estimate the amount of the subsidy, went to look at published rates and compared all the options and calculated the net cost. At the end of a 20 minute phone conversation, they concluded that the cost of insurance would be about $400 per month. The guy became irate and said “How the F* do they expect me to come up with $400?” He hung up the phone in disgust. Of course it was a wasted 20 minutes for my friend. But I’m afraid this is the tip of the iceberg; I strongly suspect that the estimated 12 million Americans who are expected to use the various state and private insurance exchanges this year will not be “easy sales” and the estimate of 1-2 hours per enrollment are way off base.

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