Saturday, February 28, 2015

Three signs the ACA private plan marketplace is working

Over at healthinsurance.org, I've noted them: 1) more "active renewals" than expected; 2) relatively low churn; and 3) a high level of takeup for Cost Sharing Reduction (CSR) subsidies -- that is, silver plan selection by buyers with incomes under 200% of the Federal Poverty Level. My takeaway:
Many healthcare professionals and scholars worry that a market providing choice from a large selection of private health plans with a complex array of features and coverage rules offers too much complexity for typical buyers, most of whom are on the lower end of the income scale.That may well be true for many, and the marketplace has a long way to go on the transparency front – for example, making clear exactly what doctors and hospitals are in each network, or what drugs are covered (this information is provided, but is often out of date and can be difficult to access). But the facts noted above provide some evidence that most buyers are making rational decisions and finding coverage worth keeping.
On a cold read, I'd add that the complex maze of co-pays and coinsurance and coverage tiers for various services in many plans is also troubling -- an extended series of nuanced bets with policyholders that the house is likeliest to win. Conservatives want more "choice" in the market; I believe that most foreign systems that filter universal coverage through private insurance offer much simpler options (with much lower out-of-pocket expense), at least on the basic insurance level (some countries mandate a basic insurance plan, offered by nonprofit insurers, with optional supplemental insurance, often provided by employers).  Also, while sightly more than half of existing customers shopped anew before renewing or replacing their coverage, almost half didn't, and many of those may be in for nasty sticker shock (the administration estimated that 70% of first-year buyers could reduce costs by switching plans, though that stat probably reflects the administration's mono-focus on premium.

The system put in place by the ACA demands a lot of improvement -- improvement that would come in the normal course of things if we didn't have a bad-faith opposition party bent on sabotage rather than improvement.  But again: some insurance is better than no insurance, Cost Sharing Reduction strongly reduces out-of-pocket expense for most low income buyers, and most buyers (about half of whom have accessed some form of outside help) seem to be making rational decisions.

I hope you'll check out the piece on healthinsurance.org.

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