Health plans may discriminate against people with costly conditions

One great advantage of Medicare is that it has one risk pool that includes people with fewer health care needs and people with more needs. And, everyone pays the same premium. It does not discriminate against people with costly conditions because everyone is at risk of needing substantial care.

But, people in the health exchanges are forced to choose between plans with different levels of benefits. Those who are healthy pick the less comprehensive plans and those who are sick choose the more comprehensive plans. Forcing people to make a choice between more and less comprehensive coverage can end up making health care very expensive for healthy people who choose lesser coverage when they get really sick.

Moreover, multiple levels of coverage allows the health plans to game the system and discriminate against people with costly conditions. Kaiser Health News reports that some of the biggest health insurers offering coverage in the state exchanges are doing what they can to avoid enrolling people with costly conditions. They are keeping their brokers from selling policies to high-cost enrollees and not paying commissions for the sale of their most comprehensive health plans.

Aetna, Cigna and Anthem are cutting back on sales commissions for customers who are eligible for coverage outside the standard enrollment period because these enrollees tend to need more care and cost the health plans more. Cigna and Humana no longer pay brokers to sell gold plans because they are less profitable than bronze plans, which offer lesser benefits.  The insurers have determined that the sickest patients needing the costliest care buy the gold plans.

The Affordable Care Act prohibits this discriminatory marketing behavior by the health plans.  The health plans, however, deny that their behavior is discriminatory.  They claim it is the only way they can afford to remain in the exchanges. At the same time, because of this behavior, experts claim that fewer people are enrolled in the exchanges than would otherwise be.  Though people can enroll in these plans online, brokers are a critical resource to ensure that as many people as possible eligible for coverage enroll.