Shopping Around Is the Key to Low Prices in Obamacare

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


Abby Goodnough writes today about switching health care coverage each year during Obamacare’s year-end open enrollment period:

The Obama administration is encouraging switching as a way to avoid steep increases in premiums — and to promote competition among insurers, as the law intends. Next year will be no different: The price of plans will rise in most states, and the administration says that 86 percent of people who currently have coverage through the federal exchange can find a better deal by switching.

“This may be just one of those environments where there’s a new normal,” said Sabrina Corlette, a professor at the Health Policy Institute of Georgetown University.

For many consumers, the volatility in the markets has been a source of anxiety and disruption. To have any choice at all is a welcome development, many say. But switching plans is also becoming an unwelcome ritual, akin to filing taxes, that is time-consuming and can entail searching for new doctors and hospitals each year.

This is unquestionably a downside to encouraging competition in the health insurance marketplace. As carriers jostle for position, the lowest-price coverage is going to change from year to year—and if you’re a price-sensitive shopper, that means your coverage is going to change from year to year too.

I suspect this problem will settle down after a couple more years, as insurance companies get more experience with the Obamacare pool and get better at pricing their policies. In the meantime, though, it really does pay to shop around. A new Kaiser study of 2016 rate increases provides some concrete numbers. If you bought the cheapest silver plan in 2015 and then you stick with it in 2016, your premium may go up quite a bit. But if you shop around for the plan that has the lowest price in 2016, your premium will barely change at all. The chart on the right tells the story. For low-income buyers, shopping around means virtually no premium increase at all. For middle-income buyers, it means a larger but still pretty modest increase.

Moral of the story: If price is a major issue for you, shop around! It’s a pain in the ass, but it pays off.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate