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A Project of The Annenberg Public Policy Center

HealthCare.gov Estimates May Be Misleading

Browsers beware: The estimated monthly premiums on HealthCare.gov may be misleading.

The troubled federal website allows visitors to anonymously surf the site for exchange plans sold in their areas and provides them with estimated prices for each health plan. (Just click on the “See Plans Now” button on the homepage and follow instructions.) But here’s the problem: The monthly premium estimates provided on the website do not consider a person’s specific age, household size or tobacco use – all critical factors when estimating premiums.

HealthCare.gov visitors using the site’s window-shopping tool are repeatedly told that “the final premium you pay may be lower, perhaps much lower, than the prices shown” once they fill out an application and apply for government subsidies. But what the site doesn’t say is that the actual premium may be higher, perhaps much higher, than the estimated premiums shown on the site.

We knew estimates would vary from the actual premiums once customers create an account, provide personal information and obtain accurate price quotes. HealthCare.gov discloses that on the page titled “How can I see Marketplace health plans and prices before I fill out an application?

But we didn’t know how useless the website’s window-shopper tool can be for certain consumers – a fact brought to our attention by ValuePenguin.com, a consumer finance website that provides its own comparison shopping tool for marketplace health plans. (Ezekiel J. Emanuel, a former White House adviser who helped design the Affordable Care Act, cites ValuePenguin.com and other alternatives to HealthCare.gov in a Nov. 15 article he coauthored on Politico called “Who Needs HealthCare.gov?”)

We decided to do a little comparison shopping of our own, based on the personal circumstances of two FactCheck.org staffers. (Important note: Nobody at FactCheck.org needs to shop on the individual market because, like most Americans, we get coverage through our employer — which in our case is the University of Pennsylvania.)

First example: 54-year-old man shopping for a health plan that would cover him, his 55-year-old wife and two dependent children (ages 14 and 21). The family lives in suburban Philadelphia. None is a smoker.

We first compared the estimated monthly premiums provided by HealthCare.gov with the estimates provided by ValuePenguin.com, and then went to the insurance company websites for actual price quotes.

For our family of four, HealthCare.gov offers six Silver plans: four Independence Blue Cross plans and two Aetna plans. (We considered only the Silver plans to keep it simple.) The HealthCare.gov estimates ranged from $708.84 per month to $982 per month.

Now, HealthCare.gov doesn’t ask for ages or even an age range when providing plan information and premium estimates for family coverage. All it wants to know is the visitor’s home state and county.

ValuePenguin.com asks for a little more information. Besides county and state, window shoppers have to provide household size, as well as ages and tobacco use for all family members. That website’s estimates were higher — much higher. A whopping 69 percent higher for each exchange plan. The premium range: $1,201.44 to $1,666 per month. (And, remember, that’s for a family of nonsmokers.)

We then went to Independence Blue Cross and Aetna websites to get actual quotes using their marketplace browsing features. Both websites asked for the same information as ValuePenguin.com — except that the insurance companies wanted birth dates, not just ages. We found, not surprisingly, that the insurers’ price quotes were almost exactly the same as the estimates provided by ValuePenguin.com. In fact, they were exactly correct in three of the four Blue Cross plans. ValuePenguin.com’s estimates were slightly off — lower by no more than 4 .5 percent — for the two Aetna plans.

Why was the HealthCare.gov website so far off the mark? The website discloses up front, while you are browsing for plans and prices, that the premium estimates are “based on a limited set of sample ages.” But potential customers would have to dig deeper into the website to find out what sample ages the tool uses. (Go to the homepage, scroll to the bottom until you see “Quick Information,” and click on “Health Plans” under the header “Plan Information for Individuals and Families.”)

In the case of a family of four, the website assumes that the husband and wife are both 30 years old. In our real life example, they are 55 and 54. That’s important because the Affordable Care Act says insurance companies can charge older Americans up to three times more than younger ones.

Of course, the closer a couple is to 30 years old, the better the estimate will be. And that brings us to our second example: a 29-year-old single man living in the city of Philadelphia.

In the case of single adults, HealthCare.gov asks one additional question that it does not ask of those seeking family coverage. It asks for an age range (“49 or under” or “50 or over”). It informs visitors at this point that “[p]remium amounts in this tool are based on specific ages,” but again you have to dig deeper to find that the specific ages are 27 for someone who selects “49 or under” and 50 for someone who selects “50 or over.”

In our second example, the 29-year-old man is close enough to age 27 that HealthCare.gov provided better estimates — but they were still too low. For six Silver plans, HealthCare.gov provided cost estimates that ranged from $209.85 to $291, while the insurance companies provided quotes ranging from $224.07 to $322. HealthCare.gov underestimated the actual cost of the Blue Cross plans by 7 percent and the Aetna plans by no more than 12 percent. (ValuePenguin.com provided a range of $224.07 to $310.71, which again was more accurate than the exchange.)

Yes, we know that HealthCare.gov tells visitors that these are merely estimates and actual prices may vary. At one point in the process, this caveat is provided:

Important note: The monthly premiums shown DO NOT take into account your income and household details. Premium amounts shown in this tool are only examples, based on a limited set of sample ages and scenarios. They may not fully reflect your individual situation. Actual plan pricing can change based on your household size, income, ages, and tobacco use.

At no point during the process of browsing for plans and prices are visitors informed that they may pay more — in some cases much more — for insurance than the estimated prices shown on the site. But the site repeatedly tells visitors that the actual prices may be lower. Every page during the process of surfing for plans and prices carries a blue box that says:

IMPORTANT NOTE: The prices shown on this tool don’t reflect the lower costs you may qualify for based on household size and income.

Most people who apply will pay lower monthly premiums than those shown here. Households with yearly incomes up to about $46,000 for individuals or $94,000 for a family of 4 will qualify for lower costs. You’ll get final quotes for specific plans based on your income and household after you complete a Marketplace application.

On one page — just before you see the plans and cost estimates — you are told twice about the possibility of lower costs. On that page, you get the “important note” above, plus this:

Most people who apply will qualify for lower costs.

Most people who apply for coverage in the Marketplace will qualify for lower costs on monthly premiums based on their household size and income.

The chart on the right shows household sizes and income levels that qualify for lower costs. The lower your income within the ranges shown, the lower your premium costs will be.

Some people with lower incomes within these ranges will qualify to save money on out-of-pocket costs like deductibles and copayments.

It is true that many people seeking insurance on the individual market will receive government subsidies that will help offset the cost of insurance premiums. In an Aug. 14 report, the nonpartisan Kaiser Family Foundation estimates that “about half (48%) of people now buying their own insurance would be eligible for a tax credit that would offset their premium.” In addition, more than 1 million people now buying their own insurance will be eligible for Medicaid, the report says.

“Among the approximately half of current enrollees who will be eligible for tax credits, the average subsidy would be $5,548 per family, which would reduce their premium for the second-lowest-cost silver premium by an average of 66%,” the KFF report says.

Those estimates don’t include people who are not currently part of the individual market but will buy coverage on the state and federal exchanges. The nonpartisan Congressional Budget Office estimates that altogether about 80 percent of the 25 million Americans with insurance exchange plans in 2023 will receive subsidies.

So, it is important for HealthCare.gov to inform them that they may be eligible for a subsidy that could lower their costs.

But, by failing to disclose the fact that actual premiums may be far more than the estimates provided on its site, HealthCare.gov has the potential to mislead those same families as well as others who won’t be eligible for subsidies at all.

Update, Dec. 2: The so-called window shopping feature on HealthCare.gov has been improved and, as a result, so has the accuracy of the site’s estimated monthly premiums. The site now asks visitors to provide specific ages for each household member when estimating the cost of premiums. It still does not, however, ask about tobacco use. See our Dec. 2 item “HealthCare.Gov Improves Estimates” for more details.

— Eugene Kiely, with D’Angelo Gore and Lori Robertson