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Hey 'Bette,' you can buy insurance outside an Obamacare exchange

The tale of "Bette," the beleaguered health insurance consumer highlighted in the (official) GOP response to President Obama's State of the Union address, has drawn a lot of blowback from liberal pundits in recent days. But one point left out is how Bette's tale illustrates a common misunderstanding about the law, one that is unnecessarily limiting consumers' options.

In her response to Obama, Rep. Cathy McMorris Rodgers (R-Wash.) said: "Not long ago I got a letter from Bette in Spokane, who hoped the president’s healthcare law would save her money -- but found out instead that her premiums were going up nearly $700 a month. No, we shouldn’t go back to the way things were, but this law is not working. Republicans believe healthcare choices should be yours, not the government’s."

Reporters tracked down Bette and found out that her story wasn't quite what Rodgers conveyed. My colleague Michael Hiltzik summarized the tale well: Bette's high-deductible "catastrophic" insurance plan didn't comply with the 2010 law's standards, so her insurer sent her a letter telling her it was canceling the policy. It offered her replacement plans with lower deductibles and broader benefits, although not necessarily lower out-of-pocket costs, for $500 to $1,100 more per month, according to the Spokesman-Review of Spokane.

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Bette acknowledged that there were more affordable alternatives available on the state's new insurance exchange, Washington Healthplanfinder. But because she opposes the law, she wouldn't even look at the exchange's website, deciding instead not to carry coverage this year.

This reminds me of one of my relatives, who adamantly refused to replace his wife's beloved but worn-out Cadillac because he wouldn't buy from "Government Motors." Unlike Bette, however, he didn't force his wife to go without a new car. Instead, he simply found another source.

So, too, are there other sources available for those who loathe Obamacare so much that they won't patronize the new state insurance exchanges. Individual policies are still available directly from insurers or through comparison-shopping sites such as ehealthinsurance.com or healthplans.com. In fact, there are more insurers and more policy options available outside the exchanges than inside.

Granted, there are so many variables when looking outside the exchange that comparison shopping can be difficult. But it's easier than it used to be, thanks to the minimum essential benefits required by the law. It's now a matter of shopping between different kinds of apples, not completely different types of fruit.

Although Obama has asked insurers to temporarily offer the low-cost policies they canceled, the reality for anyone over 30 is that Obamacare will make catastrophic plans go away, which necessarily means a sharp increase in their premiums. Those earning less than four times the federal poverty level will qualify for a subsidy, but for many people that won't be enough to eliminate the sticker shock.

Had Bette shopped around for insurance online, maybe she still would have decided it wasn't worth the cost. But people shouldn't assume that the exchange is their only option -- it isn't.

(As an aside, take a look at Chad Terhune's story about Anthem seeking to raise premiums on grandfathered individual plans -- that is, those exempted from Obamacare -- by up to 25%. It's just a reminder that the 2010 law is hardly the only factor driving up insurance premiums.)


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