For those seeking only to comparison-shop for QHPs available given the shopper's location, household membership and income level, HealthSherpa offers a process slightly more streamlined than Healthcare.gov's "see plans before I apply" feature, which has been working quite well since late December.
More importantly, HealthSherpa now enables a shopper to initiate the buying process on its site. And the company claims to have streamlined that process as well, even for customers who are applying for federal subsidies. The average customer, Wasser claims, "will save 20 minutes on an hour if they use Health Sherpa over Healthcare.gov."*
The Washington Post's Brian Fung reported the new functionality on 2/26. It was unclear to me, however, how HeatlhSherpa could streamline the subsidy application , since all ACA subsidy applications must still be processed through Healthcare.gov. Wasser explained that HealthSherpa has worked with HHS to develop its own dedicated interface on Healthcare.gov, to which a buyer starting at HealthSherpa is jumped. According to Wasser, 20-30 companies have arranged with HHS to establish such interfaces, called web-based entities, but HealthSherpa believes that theirs is the only one live at present.
HealthSherpa claims to eliminate redundancies at every stage of the process. According to Wasser, on Healthcare.gov, "an individual will browse to find a plan, try to sign up, and then browse to find a plan a second time -- and all the while a large quantity of redundant information is presented to the individual. We've removed the redundant step of finding a plan twice as well as optimized the information we present to the user to be as compact, specific to the individual, and easy to understand as is possible."
When customers begin at HealthSherpa, they go through a short preliminary subsidy eligibility determination. Once they begin the buying process and are jumped to Healthcare.gov (that is, the Health Sherpa interface on the federal site), the application takes into account the information they've already entered, e.g., the specific plan they' selected, and thus, Wasser said, "a lot of information they push onto every person [on the general site], that's only relevant to certain people," is eliminated on the HealthSherpa interface. "We show them the bare minimum they need to understand what's going on and feel comfortable," Wasser said. The application is then routed back to HealthSherpa, at which point the buyer sees the exact premium and subsidy and completes the transaction.
HHS has intimated that it may eventually allow insurers and online brokers to take the full subsidy application and send the information directly to the federal data hub. HealthSherpa is preparing for that eventuality, hoping to take it live in the next open enrollment period. "We're also working with HHS to find more ways to optimize this experience for individuals -- we hope to release more improvements in the future," Wasser said.
HealthSherpa began as a nonprofit, seeking to plug an information gap when Healthcare.gov was broken, but is now a for-profit, funded by venture capital firms Andreeson Horowitz, Red Point, and others. "We're pretty set up with capital for now but we clearly have to make money at some point," Wasser said.
Much of the team's time to date has been taken up fulfilling the complex legal and regulatory demands required to become brokers. But they're also, Wasser said, "laser focused on providing the flat out best way to signup for insurance given whatever background a person may have. This means we're actively interviewing and studying our users and optimizing the steps related to signing up for insurance daily."
Back in the days when HealthSherpa was simply a dazzlingly simple interface providing the plan-and-pricing information that Healthcare.gov was failing so dramatically to provide, and no one knew when the federal site would be functional, some wondered whether it would simply be bypassed by agile startups like HealthSherpa and ValuePenguin. That, thankfully, has not proved necessary. But HealthSherpa raises the possibility that Healthcare.gov -- and eventually, the state exchanges as well -- will face continual, salutary competition from the private sector.
It's possible to imagine such competition segueing into expanded competition in the realm of actual insurance options. Online brokers like eHealth offer plans available off-exchange as well as on-exchange. It's not hard to imagine red states seeking waivers to expand state marketplaces beyond the official state exchange, making federal subsidies available to a wider range of plans. Yevgeniy Feyman, a conservative healthcare scholar at the Manhattan Institute, envisions private exchanges opening up alongside state-run ones, and a Republican Congress and/or president seeking to widen the private market in a variety of ways. HealthSherpa provides one hint of the possibilities that private market competition may open up.
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