Friday, November 07, 2014

Evidence from Kaiser: Most ACA shoppers made informed choices

How well-equipped are America's uninsured to shop for private health insurance in the ACA's marketplace?

The scary news going in was that most of the target population had a poor grasp of fundamental insurance concepts such as "deductible" and "copay." The good news is that most buyers seem to have picked up a working knowledge of the basic tradeoff between monthly premiums and likely out-of-pocket costs by the time they pulled the trigger.

I have noted in multiple posts, summarized here, that the vast majority of lower-income ACA shoppers avoided high deductible bronze plans and availed themselves of the Cost Sharing Reduction  (CSR) subsidies available only with silver plans -- even when, as in Mississippi, the silver plans cost them significantly more per month.  Now, Kaiser Family Foundation survey data, reported this week, suggest that private plan buyers considered deductibles and co-pays almost as important as monthly premiums.


Nationwide, just over half of private-plan buyers on the exchanges (51%) completed the process alone; the rest had help from exchange reps (24), brokers brokers (8%),family or friends (7%), community or health workers 5%), or someone else (5%),  Among exchange buyers nationwide, almost as many said they found it as easy to compare copays and deductibles (64%) as monthly premiums (69%).  Moreover, buyers weighed the importance of monthly premiums and out-of-pocket costs almost equally:
Among exchange purchasers who considered multiple plans, about eight in ten (79 percent) say the monthly premium was a “very” or “extremely” important factor in choosing their current plan over other choices available, and nearly three-quarters (73 percent) say the same about the plan’s copay and deductible.
Perhaps, even if you've never heard the word "deductible," if you're faced with a price quote like the one below (for a 35 year-old in Alabama earning $19k), you'll be driven to figure out what those high-dollar quotes on the right signify. BTW, as of now, on healthcare.gov, mousing over the terms below brings up a definition. I believe that that feature is new, as a) I never noticed it before (but I miss a lot on screens!) and b), the absence of such pop-up definitions it was a core complaint in an in-depth user study by Penn researchers, described here.
Monthly premium

$18/mo

One enrollee
Premium before tax credit $181/mo
DeductibleThe amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won't pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.

$6,350/yr

Per individual
Out-of-pocket MaximumYour expenses for medical care that aren't reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren't covered.

$6,350/yr

Per individual

Healthcare.gov could do more to steer CSR-eligible buyers toward silver plans. The listing of available plans could default to silver, or at least make the sort-by-metal-level feature more prominent, or simply emphasize that the user qualifies for CSR and can only access that aid by buying silver, or warn CSR-eligible buyers more emphatically that they're forfeiting benefits if they begin to buy a not-silver plan. By and large, though, most people seem to have got the message.

Of course, there's much more to choosing a plan than choosing a metal level or balancing the three major price points. There's often a half-dozen or more separate copay formulas for different medical services; drug prices may be in tiers and the drugs covered may vary; some plans discount some services before the deductible is reached and others don't; and of course, the size and quality of the provider network, and who's in and who's out, have been difficult to determine.  But trading off premium vs. out-of-pocket costs is fundamental. And most users seem to have grasped the core tradeoff.

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