Obamacare exchanges aren't the only game in town

Americans who buy their own health insurance next year won't have to get coverage through their state-based exchange.

Many insurers will offer individual policies outside the Obamacare exchanges in 2014. Consumers can avoid the exchanges by buying plans directly from insurers or through brokers.

But should they?

First, anyone earning less than 400% of the poverty line will be eligible for federal subsidies toward exchange-based plans, so going off the exchange would likely not make sense.

But those who make too much to qualify for subsidies should look both on and off the exchanges for a plan that best fits their needs, experts say.

The off-exchange policies are required to have many of the same Obamacare protections as plans sold on the exchanges, like maternity and mental health benefits, plus insurers can't exclude enrollees because of pre-existing conditions. Only a handful of current individual policies that meet strict guidelines will be grandfathered in.

So why might one want to go off the exchange?

#1: Possible better coverage: Some insurers may opt to offer richer policies or continue grandfathered plans off the exchange to hold onto long-time customers. These policies may have more comprehensive doctors' networks or lower drug co-pays ... with a higher premium to boot, said Dan Mendelson, chief executive of Avalere Health, an advisory company for insurers. But they could be more attractive to current customers than the exchange policies, which may be more restrictive in order to keep premiums under control.

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But some insurers intend to sell the same plans -- with the same premiums -- both on and off the exchange. Those companies are betting on other advantages to make their plans attractive.

#2: Less paperwork: The off-exchange policies may also attract enrollees who won't want the additional work of going through the exchange, which involves gathering pay stubs or W2 forms, settling up an account and waiting for income and citizenship status to be verified by federal agencies.

"You don't necessarily need to go through the extra steps of applying for an exchange policy if you are not subsidy eligible," said Bruce Allen, marketing director at Blue Cross Blue Shield of North Carolina, which is selling policies both on and off the exchange there. "We can get you enrolled in minutes."

#3: Less government involvement: Some consumers have also told Blue Cross that they intend to go off the exchange because they don't want anything to do with Obamacare, either because they oppose it politically or they equate it with government assistance programs such as Medicaid.

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But shopping off the exchange has its challenges. One thing that will be tougher for consumers opting to buy insurance off the exchange is comparing plans and premiums. The exchanges will have websites where consumers can browse through the various plans being offered. But policies available outside the exchange will be sold primarily through independent agents or insurance companies, which could make it harder for consumers to weigh their options.

"Compared to the exchanges, the off-the-exchange market for consumers will continue to be the Wild West in regards to shopping and comparing benefits and prices," said Kevin Lucia, senior research fellow at Georgetown's Center on Health Insurance Reforms.

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