At the Helm

My experience shopping on the public health insurance exchange

by Rob Lazerow

This week, individuals across the country will log onto to select their health insurance before the looming Feb. 15 open enrollment deadline. More than 10 million people have signed up for 2015 coverage on the public exchanges so far—that’s already a 25% increase over last year’s enrollment.

Recently, I was one of those exchange shoppers. I’ll admit I was shopping on behalf of a friend (I get my health insurance through the Advisory Board), but I gained a firsthand perspective on the exchange shopping experience—and the implications for physicians, hospitals, and health systems.

My buying experience

My friend Laura (note: that’s not her real name) asked if I could help recommend an insurance plan for her family. She explained the context. Laura changed jobs late last year, and she now works for a small business. Her employer doesn’t offer insurance directly but decided to fully reimburse employees for buying coverage on the state’s public exchange. The employer even offered to subsidize plans up to the gold level.

Four lessons from year one of the exchanges

Laura set up her account and gave me a list of her family’s providers. I started reviewing the plans available in her city and quickly focused the search on gold-level plans to assess options with the highest actuarial value. Four plans remained. As I evaluated her options, I was struck by five realities.

1. Premiums were fairly consistent across plans. Three of the four health plans had premiums within a few percentage points of each other. One plan was markedly more expensive. Laura didn’t qualify for a premium subsidy from the government, but since her employer is ultimately paying the bill, I was able to consider all plan options regardless of price point.

2. Having a high deductible was a foregone conclusion. Even after narrowing focus to just the gold-level plans—which are designed to cover 80% of health care costs—Laura’s family would still face a deductible between $1,000 and $2,500. Granted, that’s lower than the $5,000+ deductibles we’ve seen in our research, but it’s not insignificant for a young family.

3. Determining in-network providers was tedious. Next, I set out to determine if each plan’s provider network was a good fit. I needed to visit each health plan’s separate website to crosscheck the family’s PCPs, obstetrician, and pediatrician. In some cases, I had to balance Tier 1 versus Tier 2 physicians.

After examining the physicians in the network, I turned to the hospitals. The plans tended to include different subsets of local hospitals, so I needed to recommend one narrow network over the others. I mapped out various hospitals online to get a sense of geography.

Evaluating the in-network hospitals and physicians turned out to be a tedious, time-intensive process—and I was only reviewing four plan options.

4. Physicians’ network affiliations were crucial. Ultimately, the physicians’ network affiliations—especially the pediatrician—became a critical factor. I eliminated one plan off the bat (the most expensive one, coincidentally), because the pediatrician was a Tier 2 provider and visits would have become expensive quickly. I needed to ensure that Laura and her family had sufficient hospital access should they need it, but I’m certain they’ll visit the pediatrician across the year, making it a higher priority for a young, healthy family.

5. Comparing cost-sharing details was nearly impossible. After determining which plans matched the family’s established providers, I tried to compare benefit design to make the final decision. This was much harder than I expected.

For example, I was asking questions such as, “would Laura rather have a $2,500 deductible and pay a $50 co-pay for a specialist visit or pay 10% coinsurance after meeting a $1,500 deductible?” It was incredibly challenging to create apples-to-apples comparisons—and I study these issues for a living. I had to simplify the variables, so I focused primarily on the deductible and then favored clear co-pays over more nebulous co-insurance.

Health insurance literacy: A missing element in patient engagement

A few hours after diving in, I called Laura with my recommendation: a plan that included all of their physicians, a middle-of-the-pack deductible, and good hospitals reasonably nearby. It wasn’t the most expensive gold plan—but it wasn’t the cheapest option either.

Implications for health care providers

After speaking with Laura, I began to ask what my evening’s experience means for the hospital and physician leaders I work with daily. Four takeaways rose to the top of my list.

Exchange enrollees will be retail shoppers for care
Laura is fortunate that her employer decided to subsidize exchange-based coverage. But even though they’re paying for the premium in full, she still faces a $2,000+ deductible and other cost-sharing mechanisms. Exposed to prices, Laura and her family will have a retail shopping mentality when they seek care across 2015.

Patients may not know if you’re in-network
Many exchange shoppers may not have the time or patience to verify that their preferred hospital and physicians are in their plan’s network. There’s a good chance they’ll continue to show up to your facilities and offices without realizing you’re now a Tier 2 provider or out-of-network altogether. Paired with higher deductibles, this puts significant pressure on your revenue cycle practices.

Network assembly really matters for winning market share
While shopping on the exchange, I spent most of my time reviewing the providers included in the four plans’ networks. Although each network included a subset of providers in the market—especially hospitals—I have to believe that some provider were excluded altogether. The providers who weren’t selected to be part of plan networks never had the chance to win Laura’s business. That’s why our research talks about the importance of being chosen at the “network assembly” phase, as well as at the point of “network selection.”

Patients’ decision criteria will vary
Deciding which health plan to select is a deeply personal choice, and patients will base their coverage decisions on a range of factors—price, provider network, convenience, and quality, to name a few. In Laura’s case, her plan selection was heavily influenced by two factors: her employer’s full subsidy and her established provider relationships. Since Laura had coverage last year, she was ultimately switching plans for 2015—not starting from scratch. Given the circumstances, provider continuity trumped premium cost.

Most exchange shoppers won’t have a full subsidy like Laura, even if they qualify for partial premium subsidies from the federal government. Chances are, Laura is the exception and not the norm. Price will serve as a leading factor for many (if not most) exchange shoppers, especially those who were previously uninsured. So providers don’t want to be selected for any network, they want to be selected for a premium-competitive one. Price isn’t the only factor consumers will consider, but it’s sure to be part of the equation.

Get 2015 open enrollment numbers next week

At our Future of Health Care Summit on Feb. 18, our Chief Research Officer Chas Roades will join California Secretary of HHS Diana Dooley, AHIP President and CEO Karen Ignagni, and law professor Timothy Jost to discuss the results of the 2015 open enrollment period and future of the ACA exchanges.


Can’t attend in-person? Request the webcast link or follow the day on Twitter with #futurehc15.

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