Bringing Sanity to the Health Insurance Market

Most people would not characterize the number 58 as “mind-boggling.”  And yet, that’s exactly how it felt when I searched for a health insurance plan for a hypothetical 50-year old individual living in the state of Pennsylvania.  Fifty-eight options came up, each one with a different combination of monthly premium, co-pay, annual deductible, estimated out-of-pocket amount, etc.

The monthly premiums ranged from $212 to $616.  Under one plan a trip to my primary care doctor would cost me as much as $50; under another, I’d pay nothing, but that office visit was only “free” after I had paid for $6,000 in medical expenses out of my own pocket!  If I took a generic drug, this would generally run between $8-$15.  But no plan addressed the cost of non-generic  drugs.  And why did some describe their coverage in terms of “co-payments” while others used the term “co-insurance?”

I’ve covered the financial sector for decades.  I have a master’s degree in personal finance.  I am a Certified Financial Planner™.

And I freely admit this short exercise was over-whelming.  I cannot imagine how anyone can be expected to evaluate all of their options and make a smart choice!  Do you base your decision on how sick you think you might be over the next 12 months?  (As if anyone can predict that.)   Does it simply come down to how much you can afford?   How do you know if the doctors you have relied on for years are even included in a particular plan?

Numerous studies have concluded that when we have too many health insurance choices, we make bad decisions, meaning we pay for more insurance than we need or we don’t buy enough.  A research team that looked at how seniors make decisions about selecting Medicare Advantage plans concluded that “… more choice may be detrimental if there are too many or overly complex options, particularly in high stakes decisions that involve health or money.”

The field of medicine has increasingly used technology for assistance in everything from making a diagnosis to performing surgical procedures to ongoing monitoring (my husband uploads his blood pressure to a website that his doctor can access to track how his medication is working).  Yet we’ve never applied technology to help individuals evaluate their health insurance choices.

Enter, a San Francisco-based start-up created by self-acclaimed “nerds.”  Or, as CEO Noah Lang explains it, “We’re technology people, not healthcare people.” Stride uses a patented computer algorithm to narrow down the insurance plans best suited to you as an individual.   It eliminates the hassle of comparing dozens of different plans and then guessing which one makes the most sense for your lifestyle and your wallet.

After you answer a handful of brief questions, StrideHealth’s computer  “will identify and rank plans that are the best blend of cost, doctor preferences, drug availability, and convenience, such as,  are your providers and medical facilities close to where you live,” says Lang, who adds that they hope “to bring the best of consumer web personalization to healthcare.”

And, it’s free.

Once you decide which health insurance plan you want, you can purchase it right on the StrideHealth website, which is a certified insurance exchange- or any other.

Lang stresses that Stride takes no money from insurance providers.  “We’re neutral.  The price of the insurance is set by law.  You’ll never see an insurance plan offered on the Stride website cost more or less than anywhere else.”

Stride Health launched last year in the state of California.  It now covers Texas, Illinois, New York and Pennsylvania, roughly 40% of the U.S. population, and plans to continue rolling out more coverage in the weeks ahead.

As with any kind of insurance- home, auto, life- the goal is to be optimally insured.  In other words, you don’t want to buy more coverage than you need.   February 15th is the deadline to meet the Affordable Care Act mandate to get health insurance.  Choose wisely.