Capitalizing on Opportunity in the Health Insurance Exchanges

The Affordable Care Act (ACA) granted millions of uninsured Americans access to healthcare plans on the federal and state exchanges. Utilizing consumer research, Pamela Morris, director, Syndicated Research, Zitter Health Insights, described how both consumers and healthcare professionals are navigating these innovative insurance marketplaces.

Exchange numbers recently reached 8 million new enrollees—exceeding the Congressional Budget Office’s (CBO) initial projection of 7 million people. By 2015, the CBO estimates that exchange enrollee numbers will double, becoming what Ms Morris described as a “sizable segment.” She noted, however, that there are a wide variety of health plan choices within each state, and there are 3200 plan options nationally. With so many choices and prices, consumers need guidance.

Exchange health plan premiums and costs also tend to vary based on consumer demographics, as well as the “medal class” the plans fall under. Those consumers who are in the 55 to 64 years age group will pay a premium of $148 for a silver plan, while those aged 45 to 54 years will likely pay an average of $98 for a silver plan. Those aged 55 to 64 years will pay $174 for a gold plan, while those aged 35 to 44 years will only pay $85. Because many insurers have worried about cost losses on the health insurance exchanges, there is disproportionate cost burden on many low-income, elderly, and chronically ill patients.

Co-ops are also an important trend in the exchange marketplace. Although there are not yet many co-ops established, these emerging insurance companies offer plans both on and off the exchanges. Most co-ops boast a patient-centered focus, one that is expected to guide consumers to the right health plan.

“Some of these [co-ops] have done so well, that they’re expanding to other states for 2015,” said Ms Morris. “It’s an important trend because, not only are we going to be offering more plans in more state exchanges, some of them are actually going to begin offering commercial plans as well, outside the exchanges.”

Another unique survey finding was a score that determined the cost-friendliness of each state. The survey examined each state’s metropolitan statistical areas (MSAs). MSAs were then scored and evaluated based on several metrics, including premiums, deductibles, annual maximum out-of-pocket costs, specialty out-of-pocket costs, per capita income by MSA, and several other rating factors. MSAs with higher scores, including most states in the northeast and west, were considered more cost friendly while less cost friendly MSAs received lower scores. For payers and drug manufacturers, this can shape where they decide to offer certain plans and drugs. Patients in the least cost-friendly MSAs, such as Little Rock, Arkansas, are likely to face larger cost burden with exchange plans.

The survey also found that consumers were not deterred by narrow networks. This is likely because they previously were uninsured, so slim insurance offerings were better than no plan offerings. The number 1 influential factor when enrolling in an exchange plan was premium cost, followed by the maximum out-of-pocket cost and the co-pay for a doctors visit.

Ms Morris concluded that “exchange plan options and complexities abound,” even as these exchanges continue to evolve.