The ACA individual health insurance market place will guarantee for the 2022 Open Enrollment Period that everyone who earns under 150% FPL will be exposed to at least two zero premium silver plans with CSR benefits due to the enhanced ARA subsidies. This has been making me scratch my head as I’ve been doing a lot of work on zero premium plans as well as responding to reviewers with a citation saying that the marginal enrollee (i.e. the one flipping a coin to enroll or not enroll) is fundamentally buying on price and price alone. All the other characteristics of an insurance plan (network, benefit design, prior authorization policies etc.) are fundamentally irrelevant for the marginal buyer. Those attributes matter a lot to people who have a good reason to be paying a lot of attention but the marginal buyer is barely paying attention.
Zero premium plans will be available for almost everyone earning under 200% FPL and they won’t be uncommon up to 300% FPL on Healthcare.gov. It is very likely that people will be exposed to multiple zero premium plans by multiple insurers at multiple metal levels.
So if premium is minimally relevant to individuals who are exposed to multiple zero premium plans, what matters to their decisions?
Will the first thing that they see be overwhelmingly likely choice? If so, then choice architecture and display order matter a lot here.
Will people respond to low or no deductible plans over plans that offer more comprehensive first dollar coverage?
Will people respond to companies that have a penumbra of quality?
How do marginal enrollees that are barely paying attention shop when their primary cue (price) is no longer providing relevant information?
Below is a map of 2021 Zero Premium Plan availability for single individual non-smokers with income as a function of federal poverty level on Healthcare.gov:
gvg
I don’t think I am typical, but way back 27 years ago when I was hired with a job with healthcare for the first time, I was healthy but aware of the risks I had been living with. I picked largely based on company reputation through consumer reports and web searches for an insurance company that actually paid when people got sick and didn’t deny valid claims with a lot of confusing paperwork. I already knew that mattered more than the promises before you were sick. I think I picked that up from car insurance experience compared to other people I knew.
Then I was pretty healthy for 20 years and wondered how it would really work if I needed it. Every few years I rechecked reputation and the best choice was staying with Avmed. Then I got serious cancer, found early by chance, because something else was hurting and having good insurance meant doctors felt free to order tests to find why, and discovered hidden early cancer. I was in surgery in about 10 days and my total bills for about 8 months of expensive treatment were not enough to make it worth itemizing that year even with some prior high dental expenses. Surgery cost 200 and copays were 20 to 40. It just didn’t cost me much. I was bothered by my employer dropping Avmed later and switching us to Aetna, but their reputation is also pretty good. For me, that is a pretty big thing.
Price does matter. When I was poorer and buying health insurance on my own, I learned billing competence matters too. Blue cross blue shield drove me away by double charging me then not fixing it for months always saying their computers were down and I should call again tomorrow after having been on hold for an average of 45 minutes, multiple days. They couldn’t be bothered to write something down and check for me. Understaffed, indifferent, possibly on purpose to drive claims to give up. Worthless.
Big R
Why is south Mississippi excluded from the map of healthcare.gov zero premium data?
Lobo
@gvg: To his/her/they’s point. Cost/Quality(of benefits)/Trust(in company) are the biggest three things in my mind about insurance. If I was King, I would mandate three plans that were reasonable in cost, but had quality benefits, and where the company was trustworthy. I would try for 80% in all areas, but I think going for satisficing over optimal would be the goal.
Jim Bales
FWIW, metal band strikes me as an obvious cue for someone who isn’t putting in the time to research (and there are many reasons why they wouldn’t!)
They might hear the pitch as: “You can have a free plan — would you like bronze, silver, or gold?”
Best,
Jim
David Anderson
@Big R: Good question — zero premium plans are only possible when the plan only covers essential health benefits. The plans in S. Mississippi all cover some small non-EHB benefits so the cheapest plan will cost just under a buck no matter what.
KrackenJack
How much leeway does healthcare.gov have to create a score based on those metrics? It could be very influential and somewhat subjective – which would be painful for insurers who are not at the top of the list.
Perhaps it’s a third-party function since some of the quality or patient satisfaction may be from external sources.
Brachiator
I keep wondering how best to appeal to younger, healthy people who might choose to go without health insurance.
In California this is the first year of a state personal mandate, but I have noticed, from conversations with tax preparers, that quite a few people didn’t realize this and may end up paying a penalty. Resistance or lack of information, I guess.
But tax professionals note that many undocumented people who file tax returns typically get health insurance for their kids, even if they skip it for themselves. California has good options for this.
When I got my first full time job, health insurance was an easy option, a standard benefit. I’m not sure, but you might have had to jump through hoops to forego it.
Parmenides
I have been in three healthcare modes since the law went into effect. Been very price sensitive to monthly premium as my income was not high but me and my wife made too much for subsidies, dropping coverage when the price wasn’t sustainable and going with very comprehensive car insurance with medical bills paid for, having way more money and being only slightly price sensitive as to premium but more for deductible because the last thing I want to deal with in an emergency is a 7000 dollar bill that I have to find money for.
Basically if the cost is negligible to your income I think most people will want to be fully covered with low deductibles as that gives the most flexibility for not catastrophic care. i.e. you didn’t get hit by a car but somethings gone wrong that is going to take significate contact with the medical system.
I’m a somewhat medium consumer of healthcare in that I have a generic prescription and I have to schedule a 10 minute visit with a doctor once every 6 months to maintain it. I get a regular check up also.
My wife on the other hand has a chronic condition with an unbelievably expensive biologic drug that will blow past any deductible so she goes with a no deductible plan.
We could both get healthcare from our work but forego it buy our own plans as the options at work are worse than the options on the exchange.