UPDATE 13:50 Health Sherpa tweaked their recommendation engine. Originally the two plans were tied on total costs for the “low” cost scenario and there was no further criteria for this specific scenario of low CSR Silver options. They’ve added additional tie breakers if the first tie breaker is inconclusive for this odd, corner case.
Buying individual market health insurance is confusing.
I’m an insurance expert. I don’t think that I could pick out the optimal choice for my family when we lived in Pittsburgh as there were too many choices. I am very confident that I could pick out a not-bad plan but I am confident that I would be leaving a little bit of money on the table somewhere.
Decision supports are critical. Katherine Hempstead in Health Affairs argued this point in January 2017:
We may be entering a world where insurance products will be more loosely defined, and plan standardization less likely. In such an environment, the availability of high-quality consumer decision support will be more important than ever. While the future of insurance exchanges is currently unclear, individual market consumers in every state will continue to benefit from high-quality decision support.
And we need good decision supports. One of the criteria for “good” support has to be steering people away from dominated plans. A dominated plan is when on all relevant criteria, the alternative plan meets or beats the dominated plan. For health insurance, some of the relevant criteria will be network, premium, cost sharing, customer service and hassle. Evaluating hassle and customer service between firms by using only publicly available data is very difficult, but even on the simple issues of network, premium and cost sharing, domination can be assessed.
HealthSherpa shows dominated plans as the recommended plans. I looked at the plan recommendations for a single 40 year old making $25,000 in 2018 in Roane County, Tennessee, Zip Code 37763. This individual qualifies for weak CSR if they elect to buy a Silver plan.
Blue Cross and Blue Shield of Tennessee is the sole ACA insurer in the county. BCBS-TN engages in aggressive Silver Gapping by offering a high premium plan that is the benchmark Silver and a low premium Silver. For this individual, the low cost Silver plan is a $0 premium plan after subsidy.
And yet, Health Sherpa is recommending that the Bronze plan. It has the same premium ($0), the same insurer, the same network. The difference is the deductible for the low cost Silver plan is significantly less and the maximum out of pocket is also significantly less than the Bronze out of pocket.
The low cost Silver plan for this individual’s situation dominates the recommended Bronze plan.
This is a problem as people will anchor on the recommended options. Dominated choices are bad choices for consumers and good decision support should move people away from clearly bad choices.