I’m writing up something that has been bugging me for a while. We know that people mostly choose health insurance in the individual markets as a function of premium first and foremost. We know that zero premium plans are increasingly common since 2021’s passage of the American Rescue Plan. We can guess that way more people are exposed to way more zero premium plans where they no longer have a key piece of salient information that differentiates Plan A from Plan B to Plan C.
Sometimes a single insurer will offer Plans A, B, and C which only vary by the size of the network. The network of Plan A is a subset of Plan B’s network which is a subset of Plan C. My work with Petra Rasmussen found people frequently made dominated choices between a two choice environment in the ACA when we held network and insurer constant.
I think there is a good chance that a lot of people are making choices where there is stacked domination. C dominates B which dominates A. How are people making choices here? This is messy and confusing and to me as a researcher, really really interesting.
Baud
I was expecting more BDSM.
David Anderson
@Baud: Only with ongoing, enthusiastic, withdrawable and active consent….. health insurance lacks at least one of those characteristics
Leto
@Baud: that’s over on his Substack page; gotta be a premium member for that.
CaseyL
A few times in my life I’ve had coverage through the ACA (either when I was unemployed or when my employer didn’t offer its own group plan but instead paid my ACA premiums).
Of course the premium and deductible were major considerations, but I absolutely paid attention to the networks.
I knew which hospitals I wanted access to, so I focused on those and which primary practice groups could get me into those hospitals.
Steve LaBonne
I suppose it doesn’t really need to be said that a system that forces people to make choices whose future consequences they can’t possibly anticipate (due both to asymmetrical information and because their future health is unknown) is a bad system that will cause needless financial disaster, suffering, and death. Sure it’s better than no insurance but that’s an awfully low bar.
Anonymous At Work
I would say the primary factor with superficially-similar plans with different network structures would be differentiated based on an individual’s existing health care USE network. For example, I was looking at USAA dental insurance as a second dental insurance type but realized my employer’s network and USAA’s network did not overlap within respectable driving distance (45+ minutes). Therefore, the other insurance, at roughly the same cost, would have disrupted my existing network for no obvious gained utility.
Generally, if I had to get supplementary or a second insurance system, I would look to maintain my current network of providers (except for one guy I saw once and dropped like a rock) as a primary factor, holding premiums the same. Out of pocket maximums and/or coinsurance would likely play a role but a softer one, meaning that 10% vs. 12.5% vs. 15% coinsurance with varying copays and maximums would only come into play if I thought I might need something expensive.
tl;dr Status quo bias would prevail unless acted upon by another market-force.
Ohio Mom
@Steve LaBonne: What you said.
As my sister is fond of pointing out, “Their actuaries are better than your actuary.” Though I doubt even actual actuaries do much better than the rest of us.
You could do your best research as far as identifying which health system you want to be served by, then all your favorite doctors could leave. I’d say, Ask me how I know, but you can guess.
Dangerman
I am the middle of something like that right now.
I’ve shared that I have had a heart issue that was diagnosed almost 5 years ago now (11/1/2019, an easy date to remember). Been through a number of procedures, all kindly covered by my present insurance …
… which is going away at the end of the year. I’ll switch over to one of the plans of my new employer on 1/1/2025. No idea what the transition will be like.
Where things get interesting is I was referred out by my LLUMC (Loma Linda) specialist to an LLUMC surgeon recently; I rather begged to have all done before the end of 2024 and that’s the known goal of the specialist and the surgeon. Clock be ticking, however.
Do I know what the new surgeon will do? A very, VERY little bit. Do I know what might extend out into 2025? Not in the slightest. I have no idea what recovery time will be for the next, and hopefully last, procedure. I’m tired of Anesthesiologists knocking me out (the next one will be number 8 for my heart; 8 is a very lucky number for me for reasons too long to explain although damn load of good it did for me with any Lottery).
Anyway, going to have to make sure new network covers LLUMC work, just in case. Fun times.
TBone
@Steve LaBonne: 🎯
WeimarGerman
It would be wonderful if every insurer had to label their plans by dominance, or would that mean that insurers would tweak plans by some tiny feature to avoid A being dominated by B?
As one of my mentors always says, “The fastest way to change healthcare is through legislation.” Let that sink in for a while.
Ohio Mom
@WeimarGerman: We’ve seen many examples of this adage, haven’t we?
StringOnAStick
I haven’t had to think much about which hospital or hospital system to choose since there’s only 1 hospital in this city and it’s the major centre for much of central and eastern Oregon. They are the 800 lb gorilla here.
I was chatting with a retired surgical nurse yesterday who is having to wait 9 months for her knee replacement surgery, and between my husband and I we’ve had 3 doctors leave their practices over the past 2 years by leaving town. This leads me to think that while this is a very desirable place to live, play, and raise a family, it’s also increasingly expensive to live here and being a “one hospital town” with most group practices a subsidiary of it, the pay isn’t nearly as good here so the younger docs are voting with their feet.
Steve LaBonne
@Ohio Mom: This is why my wife and I are on traditional Medicare with plan F (her) or G (F went away before my enrollment period- politician bullshit about patients “having skin in the game”). Thank goodness we can afford it. Many seniors can’t and are forced into Medicare “Advantage” where they have to make the same impossible choices we’re talking about. To me that situation is scandalous. It’s a betrayal of the promise of Medicare.
Fake Irishman
@David Anderson:
In the next issue of Health Affairs I want to see a perspective on the utilization implications of mandating that health insurers identify safe words in policy documentation. There should probably be graphics.
David Anderson
@Fake Irishman: You want to write that IRB proposal for me?
Also check your e-mail re: November
edgefigaro
@Fake Irishman: I feel like I was following along with your sentence until I got to “safe words.”
I’m totally lost, but also giggled a bit.
Bodcaious
The last private health care insurance shopping I did in the states (2022) was in a very, very small rural market. Olympic Peninsula. There, my options were VERY slim. I selected my plan on what network was available, the restrictiveness of treatment (HMO or PPO/ 2 choices) , and travel time. The A,B,C came down to throwing together an economic stew with the ranking 1-where did access to my current doc-of-choice fall, 2-‘how healthy am I’ roulette, 3-deductible cost, in that order.
Today I’m a happy camper. I live in Japan and my international healthcare insurance is soooooooo affordable!!!! It’s making it harder to consider a move back to the states anytime before I’m 65.
Bodcaious
[Oh man! My comment was in queue and then …… gone??? Will try again]
Last time I was in the private healthcare market, my options were very, very slim 2022. Rural Olympic Peninsula had essentially 2 choices – HMO and PPO. I based my decision on 3 things. Where did my current doctor-of-choice fall (1), travel time for visits (2), how-healthy-am-I roulette (3), cost of A,B,or C (4). In that order. Since then I moved to Japan and my international health insurance is soooooo much affordable. It makes it hard to consider returning to the US before I turn 65.
Fake Irishman
@David Anderson:
I will do so. Usually don’t check that one as much, but if it’s about Nov. then that was the right account to send it to.
Fake Irishman
@edgefigaro:
just riffing off the BDSM discussion.
WaterGirl
@Bodcaious: I assume this was your first comment, or your first comment with a new nym, or your first comment on a new device?
In any case, it went into moderation. I just released it, so your comments should show up right away now.
Quaker in a Basement
How are people making choices here?
At my house, the breadth of the network isn’t what matters. It’s which networks include our preferred providers. After that, if there’s still a choice to make, it’s probably going to be decided by price.
WeimarGerman
Another evil thing about networks is that the insurer and provider group can decide to cancel their relationship mid-year. IIRC this is happening in upstate NY with UnitedHealthcare right now.
Cancelling a large fraction of the providers in-network should be illegal or a life-event (which would still suck bc it would reset deductibles mid-year).