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.