The “Good,” The Bad, and The Bronze

Ahhhh, marketing.

A good definition of marketing can be found at Wikipedia: “the process of communicating the value of a product or service to customers, for the purpose of selling that product or service.”

Actually that description would be a lot better if an adjective like “supposed” were placed in front of the word value.

Let me explain. A marketing consultant once told me a story about a project he did for a software retail chain in the late 1990s. He was tasked with improving sales of a program that claimed to make dial-up Internet connections faster.

So he re-designed the box with bold colors, a new name, and had the store place the CD-ROM in the busiest checkout lane in each store. Now, this may be pure Marketing 101, but afterward even my friend was amazed at how sales of the same, crummy software skyrocketed.

I guess when it comes to selling something, it’s all about how you package it.

The same can be said for health insurance. With compelling names like “National Preferred Plan,” or “Choice Advantage,” insurers aim to lure potential customers into buying the most expensive – and therefore most lucrative – policies.

By far the most brilliant makeover marketing tactic in health insurance though has been the development of the so-called “metal” plans – Bronze, Silver, Gold, and even Platinum – that are all the rage under the new ACA guidelines.

If you believe that these labels were created to help you pick the best insurance coverage, make no mistake. These shiny precious metal labels were designed to fool you into thinking that the more valuable the level, the “better” coverage you’ll have.

I mean, who wouldn’t want to go platinum with a hit record instead of settling for gold? Have you ever heard any coaches telling their athletes to ”go for the silver?” Of course not.

In our society, platinum is better than gold, which is better than silver, which is better than bronze. Applying this to the concept of health insurance, it then begs the question – what exactly would one get for a “Bronze” level policy?

Well, as it turns out, a lot. A lot of potential risk to be sure, but in the majority of cases a lot of actual savings too. And for better or for worse, both in sickness and in health, you could be a lot richer or a lot poorer, depending upon which metal you’d like your health insurance coated with.

To illustrate, I went to ehealthinsurance.com and used Dr. Wacasey’s Equation to compare various health insurance plan offerings from Aetna, Blue Cross/Blue Shield, Cigna, and Humana:

  • In no cases did I qualify for a subsidized premium 🙁
  • For myself, I used my birthday (10/12/1968), my gender (male), and my ZIP (76051).
  • I did not check the “Tobacco User,” or “College Student” categories in any instance.
  • I checked the “I recently lost or am losing coverage” selection, and for the “Date of event” I entered August 24, 2014.
  • For my spouse I used the same birthday as mine (10/12/1968).
  • For the children I chose one Male and one Female with the same birthday (01/01/1998).

For Aetna, I compared the following plans:

   – Bronze: TX Aetna AdvantagePlus 5500 PD
   – Silver: TX Aetna Classic 5000 PD
   – Silver: TX Aetna Classic 3500 PD

In the case of Aetna, just like the school districts in my previous To pay, or not to pay? That is the Question…post, it just doesn’t seem to make any sense to buy a policy other than the Bronze.

For Blue Cross/Blue Shield, I compared these plans:

– Bronze: Blue Choice Bronze PPO 006
– Silver: Blue Choice Silver PPO 004
– Gold: Blue Choice Gold PPO 011

The Blue Cross/Blue Shield folks have a mishmash of outcomes after using The Wacasey Equation. Interestingly, in every category the Silver plans have the highest W value, and I suspect this is because when given a choice of three variables, most people tend to find comfort in the middle.

Even more interesting in this group however is the fact that the W for Employees is actually lower for the Gold ($8,753) plan than it is for the Bronze ($9,291)!

Wait one minute, though, because all is not as it seems here. We’ll discuss this finding in detail after we analyze the last set, but here’s a hint: take a look at the difference between the Premiums for those two plans…

For Cigna, I compared the:

– Bronze: myCigna Health Savings 6100
– Silver: myCigna Flex Health 1500
– Silver: myCigna Copay Assure Silver

Each of the Cigna possibilities just sticks to the previous pattern of the more “valuable” the plan and its so-called coverage, the more you’ll end up spending if you or yours has a health catastrophe.

Lastly, for Humana I compared the following plans:

– Bronze: Humana National Preferred Bronze 6300/6300 Plan with Children’s Dental
– Silver: Humana National Preferred Silver 3650/3650 Plan with Children’s Dental
– Platinum: Humana National Preferred Platinum 1000/1500 Plan with Children’s Dental

Like the Blue Cross/Blue Shield Employee plan, every one of the Humana Platinum plans has a lower W value when compared to the corresponding Bronze plan. On the surface, this would make one think that the Platinum has to be the better deal.

But…again do some math and look at the differences between the Premiums. For example, with the

 

So as you can see, the shiny metal policies may cost a lot more than the Bronze ones, but which has the most value? Of course, you have to decide for yourself, but for my money, I’d rather potentially save lots of pennies than spend them all on Gold.

Next time we’ll take a closer look at some of these numbers, and introduce a few more examples that will help quickly and easily prove – again – that when it comes to health insurance, less really is more.

Remember, It’s not the COSTS of healthcare that are outrageous…it’s the CHARGES.

Physician. Health Insurance Agent. Author. Health care humorist. Medical satirist. Disruptor. At your service. My name is Kevin Wacasey, and I’ve been practicing medicine since 1994. When I graduated from medical school, I took an oath to do no harm to my patients. To me, that includes financial harm. But since health insurance took over health care over 40 years ago, health care prices have skyrocketed. And despite what we’re told by the media every day, it isn’t the costs of health care that are outrageous; it’s the charges. So if you’ve ever wondered why we spend so much on health insurance and health care, then come along and join me as I explore the crazy world of Healthcareonomics. Health care doesn’t have to be expensive. Let me show you how. For speaking opportunities and to pass along your questions/comments, please email me at drw@healthcareonomics.com.

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