The Exchanges are set up to display plans by metal tier and then usually by either premiums or deductible with lower premiums/deductibles first and the higher values at the bottom of the screen. We know that people are drawn to the top two or three results on a search, as that is how most of the SEO firms make their money. We also know that any system can be gamed if there are not strong social or legal conventions against gaming that system.
For instance, one insurer has offered no deductible Silver policies without any cost sharing assistance. How is that done? These plans are structured with no first dollar obligation. However every service has a very high co-pay that is at or above typical pricing for the service. Every PCP visit has a $125 co-pay, every specialist visit has a $200 co-pay, and a hospitalization has a $3,500 co-pay. The plan design is structured to make the co-pays act like a deductible without calling them deductibles. It is a clever way to game the search logic in order to artificially bump these plans’ attractiveness.
How could we unspam the exchanges?
I think the Exchanges next year should incorporate a new set of numbers. The first number would be the absolute worst case scenario where each plan has everything maxed out. Company A’s no deductible Silver might have $178 monthly premiums and a $5,300 maximum exposure while Company B’s $1,500 deductible Silver might have a $179 monthly premium and a $4,200 maximum liability. This would provide context to the premiums and reduce the gaming ability of insurers who use co-pays as quasi-deductibles. As a seperate note, this could be an area of redefinition for the meaningful difference regulations as plans are currently meaningfully different if there is a change in deductible or co-insurance, but if the worst case scenario numbers don’t change, are they meaningfully different?
The other two numbers would be a low utilization case such as the 25% percentile of projected users and the medium case scenario such as the 70th or 75th percentile of the claims experience. The low use scenario would be a person who uses the no-cost sharing services, goes to the urgent care once or twice during the year, and gets a couple of low cost drugs and a cheap lab done. These are the people who are paying in to cover the sick. The 75% case is the low cost user experience plus a specialist visit or two, a low intensity chronic condition like asthma, a few prescriptions and perhaps an ER visit without an admission. Those numbers would allow for much more useful comparisons of how good a plan covers expected health care costs as well as making it more transparent.
Another Holocene Human
(Newer, less fucked mobile device.)
Hear, hear, Richard.
Eric U.
interesting post as usual, and as usual it’s accompanied by stunned silence.
richard mayhew
@Eric U.: A buddy of mine runs a local politics blog, and made an interesting comment over beers a while ago:
“With me, I look at the Springfield News Telegraph morning headline and write “I’m outraged…..” that’s good for a traffice spike.
“With you, you look at the what the Springfield News Telegraph will be in six months or a year and write “This is why….”
MomSense
These are great suggestions that would make choosing the right plan much easier.
Richard do you know of any handout/resource that those of us in the helping professions could use to give our clients that tells them how to access the exchange and which life events would allow for enrollment outside the open enrollment period? Once a person goes to the website they can figure that out but I’m pretty disappointed that I try and help someone after they have gone through a divorce and they were never told by their attorneys that they could access health insurance so they never even bothered to try.
richard mayhew
@Eric U.: Honestly, I’m writing for several audiences here at Balloon Juice, one of which is the general readership, one of which is the commenters (two very different sets of people) and a third is wonks/policy makers who can actually follow-up on my ramblings, and they’ll never comment, except via e-mail.
richard mayhew
@MomSense: Let me look into that…. there has to be something somewhere.
richard mayhew
@MomSense: The bottom half of this page could be helpful:
http://obamacarefacts.com/special-enrollment-period/
MomSense
@richard mayhew:
Thank you! I wonder if State Bar Associations are offering CLEs about health care. I can imagine that attorneys would be bumping into multiple ways in which the PPACA would affect their clients.
japa21
Interesting article in the Milwaukee Journal-Sentinel this morning about a locally based insurance company closing its doors. The blame is put on Obamacare for ***gasp*** getting rid of pre-existing conditions and ***gasp*** setting the amount of premiums that must go to pay for actual medical care. Approximately 1,200 people will probably lose their jobs in the area, whcih is not good.
I happen to be aware of this particular company. It is one of those that rents provider networks because it can’t afford to set up its own. It also is in several exchanges. That is not a good combination. Historically, rental networks do not get as good a discount from providers as direct networks do. Plus, it costs money to rent a network. All of this means that there is much less margin to work with and, since to compete these types of companies keep their premiums at a level comparable to those companies that can get better networks and don’t have to pay a rental fee, they are a poor business model.
What is interesting is the comments section which totally lambasts the ACA. Any time someone tries to point out actualities they get drowned out. The most amusing comment was from someone who talked about the irony of how the leftists came up with the term Obamacare until it started being a failure and now call it the ACA. The dimness is strong in that one.
http://www.jsonline.com/business/assurant-considering-sale-of-milwaukee-based-assurant-health-b99490422z1-301614251.html
mtiffany
An external social-media site that rates the policies listed on the exchanges? Since no Congress-critter beholden to the insurance companies is going to vote in favor of a law which runs counter to the financial interests of their paymasters, that leaves consumers to share their experiences and/or people like Mayhew in the insurance industry to provide their analysis: Yelp for the Exchanges. Or DicksList, if Mr. Mayhew wants to do a KickStarter to set up an AngiesList for the medical insurance industry which also has a name suggestive of what you’re NOT looking for in an insurer.
thruppence
As my impending divorce looms, I expect to spend a lot of time sifting these choices.
richard mayhew
@japa21: Interesting, and an ACA success story, as Assurant is a very high cost insurer (entering my personal info into HealthSherpa saw the cheapest Assurant Bronze plan $125 above the cheapest Mayhew Bronze) … expensive providers with shitty value propositions lose money and leave the market… Socialism….
japa21
@richard mayhew: Thought you would find it interesting. Yes, this is market capitalism at its best.
Eric U.
Richard, thanks for your posts, even though you get no comments I am sure people read them.
I suppose I shouldn’t have been surprised that companies gamed the system, but I was.
jl
I always read to the posts at the Mayhew health care blog. Thanks for another informative post.
Not sure I understand the subtleties of this post. I gather the basic idea is to come up with something analogous to an average annual percentage interest rate (like in consumer finance), except you need several numbers for high utilization and low utilization standardized patients?
guachi
I quite like this idea. I’m a smart guy (I hope…) but I poked around healthcare.gov when it began and and a difficult time getting through all the jargon. At least bronze/silver/gold/platinum makes some sense to anyone who has watched an Olympics about what tier is better.
But I’ve never had to think about that stuff and I’m 41. I’ve been in the military for 14 years and before that did the “I’m young and can’t afford health insurance”. Any way to more simply divulge how much something might cost is good in my book. In addition, if there are enough entrants, I’m sure some, especially on a state exchange, could pressure states to require more transparency.
MomSense
@thruppence:
Sorry about the divorce. Even when we want to dissolve a marriage, it is still a hell of a thing to go through. I wish you all the best and encourage you to make sure you have a good support network. Hugs to you.
TriassicSands
American (for-profit) health insurance companies would never try to trick people into buying policies that weren’t good for them. That could just never happen in America. No way. Never.
Besides, since the average American is in possession of perfect information (largely acquired from Fox News), such a transparent ploy could never work.
And that’s why we have the best health care system in the world.
jl
@TriassicSands: One of the reactionaries’ tactics was to bash the ACA and tout the ‘unregulated free market’ system of Switzerland. So, we could call their bluff.
Let’s do the ‘unregulated free market’ system of Switzerland and tell all health insurance companies that they have to offer a completely standardized basic plan on a non-profit basis (though ‘non-profit’ does allow for ‘normal’ economic profits as a return to management). If any company says it cannot provide for their current customers within a federally set premium band, they get a top to bottom open book audit of everything from how much they pay for band aids, to how much the docs get, to network contracting, to how reserves are managed.
That unregulated free market does work wonders. Annual enrollee churn in Switzerland below 4 percent.
Edit: there is a separate market for supplement for-profit policies for those who want more coverage, and that is much less regulated.
Monala
The problem with a copay that acts as a cost-sharing or deductible is that usually you have to pay the copay at the time of visit, and the deductible is billed later. With a later bill, you can usually request to make payments. I’d have a very hard time coming up with $200 at time of visit to a specialist, but could easily make four $50 monthly payments toward my deductible.
Benw
@TriassicSands: does anyone have a spare fuse for the Sarcasm-o-Meter? This one just blew. :)
Brachiator
@richard mayhew:
I am not sure that any revisit of how the Exchanges are set up can happen as long as the GOP controls the Congress, especially the House.
And there is also the looming Supreme Court decision that must be factored in.
Richard Mayhew
@Brachiator: This proposal is purely an administrative/rule making change that is controlled by HHS and would be indepedent of Congress for healthcare.gov, and it is a state management decision for the state run exchanges. It is an implementable change.
Brachiator
@Richard Mayhew:
Good to know. Is there any group actively considering these changes?
Also, I would think that getting these revisions done uniformly for all the state exchanges might be a little tough.
Richard Mayhew
@Brachiator: As far as I know, no one is working on these changes. It is a policy idea, I’ll probably submit a comment to the next round of HHS regulations to see if I can get any traction with this.
And I agree, a 50 state roll-out is impossible. It would be a change at a couple of states in year one, a couple more in year 2 and then idiosyncratic adaption after that.