Insurance Companies mislead in the market place

When I signed up for insurance last year in the Maryland government website, the policy information clearly said that the insurance company pays 80% of the costs after the deductible. However, I think the insurance company generally pays 50% or less. The insurance company sets artificially low limits on what it pays for each procedure. The result is that the insurance company paid some last year, and the doctors and hospitals came to me for the rest. The 80% information is deception. The insurance companies do not provide their payout limits so that I cannot tell what the real percentage coverage is before signing up. If insurance companies would publish their limits, then I could check with some doctors and hospitals what they charge and calculate the real percentage. Because the insurance companies set artificially low limits, the deductible takes longer to reach, and the percentage paid is much lower than 80%. This is certainly deception. And this deception prevents Obamacare from being useful, and causes Obamacare to put additional unanticipated financial burdens on the poorer people of society. My insurance company is CareFirst. But I doubt that it is only CareFirst. I do not see ANY insurance company publishing its limits on doctor’s fees and hospital costs. For example, if the doctor charges $500 for procedure X, the insurance company might allow only $300 for procedure X. The insurance company then multiplies 300 x 80% for its share of the cost which comes to $240. The patient has to pay the rest which is $260. From this we see that the insurance company actually pays 52% ($260 / $500). 52% is a lot less than the 80% that the patient was expecting.

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Thanks for writing.  What you are describing is actuarial value.  Actuarial value is the average amount your plan will pay for covered benefits (not just to you, but to everyone on the plan).  This amount includes copays, coinsurance, and amounts paid after you have reached your deductible.  In general once your deductible is reached your insurer will typically pay 100% of costs for covered in-network services, but not always.  The actuarial value of your plan is 80%, this means that your insurer will pay about 80% of all costs for everyone on the plan.  In reality your insurer may pay much more for one person than an other.  Also although the actuarial value is called 80%, it is actually a range of 78% to 82%.  We are working on a page that explains all of this more clearly and updating our site to avoid confusion over this.  Read this document on actuarial value in the meantime for more information.

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