Tuesday, June 02, 2015

Too many choices on ACA exchanges?

The Health Exchange Summit held in Washington, D.C. May 11-13 brought together many of the people most directly engaged in implementation of the Affordable Care Act. All, excepting Michael Cannon,  mastermind of the King v. Burwell suit seeking to cripple the ACA, are committed to extending access to affordable and effective health care to as many Americans as possible and to to making the ACA work effectively.

Given that commitment, I was struck by a persistent chord of uneasiness about the complexity of insurance choices facing Americans. That uneasiness was literally the keynote, delivered by Princeton healthcare economist Uwe Reinhardt, whose  presentation might have been titled, "Why we can't have nice things like the Swiss."  Switzerland's health insurance system served as something of a model for the ACA, as citizens are mandated to purchase private health insurance on an exchange, with the help of means-tested premium subsidies. Reinhardt's presentation drove home the dazzling simplicity of a Swiss health insurance exchange, displayed on screen -- in which  dozens of insurers compete but all offer a standard benefit package

Reinhardt suggested that Americans are unduly enamored by choice, which breeds complexity. Research shows he said, that "People can't choose among more than 5 items. Offering 130 health plans is a prescription for disaster." The Swiss, he said, have never heard of an insurance broker. and the U.S. system would not need navigators if the choice were simple enough. He mocked federalist claims that states need to develop solutions that fit local conditions by flashing photos of identical McDonald's in Massachusetts and Tennessee.

Reinhardt is fond of expressing exasperated bemusement at all things American. Perhaps more surprising was the wistfulness expressed by the second keynote, healthcare consultant Jon Kingsdale, who was the founding executive director of the Massachusetts Connector when Romneycare was implemented. When the Massachusetts Connector first went live, Kingsdale said, "people would come up to me at parties and say, 'this is great -- it's so easy.'" Not so with the ACA.  Gearing up for Year 3, "instead of focusing on how to delight customers, we're still worried about how to get the goddamned back end working."

For states that built their own exchanges, Kingsdale, now a director with Wakely Consulting Group, said, "the cost of maintaining IT systems is mind-boggling. In Massachusetts we spent $1 million or two building the system and $200,000 a year maintaining it. Multiply that 100 times for states establishing their own exchanges." Kingsdale echoed Reinhardt's dismay over the complexity of choice facing consumers. "We thought brokers wouldn't be necessary, it would be so easy."

Rather than focus on how the choice might be simplified, however, Kingsdale pivoted to how to deal with the complexity. "With the confusion of choices, there's more and more need for decision support tools." Such tools would ask the customer a set of questions about medical use and "get a profile, then rank the options for that customer. That's essential if you have to choose between 173 plans. My preference would be to standardize, offer 23 plans. If you have 173, you've gotta have decision support tools."

Such tools are being developed in the private sector, Kingsdale said, which is "working furiously to advance the technology and relieve the horrific confusion." Rather than trying to build state-of-the-art online exchanges from scratch, he suggested to state officials, "Why not try to rent, leverage what's already being offered" in the private sector,

The e-brokers want in

In a later session on health exchange technology issues shared in the public and private sectors, Kingsdale, now a director focused on health exchanges at Wakely Consulting Group, picked up his own thread, asking a panel of consultants and technology executives,  "what's the neatest thing out there?  Don Garlitz, in chart of exchange solutions at bswift, described his company's Ask Emma decision support tool, used by employers offering multiple plans. Ask Emma, he said, "gathers information we already know" about an individual -- demographics, family history and claims history -- and "builds a utilization pattern," which is used to give the individual an estimate of likely out-of-pocket costs for each plan on offer.

For exchange technology vendors, the possibility that state exchanges would increasingly outsource technology development was naturally a theme. Web broker entity GetInsured has already pitched a pre-fab shared exchange platform to states, as well as a "lean SBM" (state-based marketplace) that it claims could be stood up within 60 days -- e.g., if the Supreme Court upholds the plaintiffs in King v. Burwell and invalidates ACA premium subsidies in the federal exchange.

GetInsured CEO Chini Krishnan accordingly opined that state exchanges are "in the distribution business, not necessarily in the software business" and forecast that they would "move from being designers of technology to consumers of technology." He suggested that the ACA exchanges at present are behind the curve with respect to providing "the usability we see in a range of other industries."  He stressed, as had Accenture's Philip Poley in a prior session, that the exchanges needed to make the shopping experience available and user-friendly across all platforms, including mobile and social media sites.

The online brokers naturally were interested not only in providing technology to the government exchanges. At present, e-brokers that have been designated web broker entities have a degree of integration with healthcare.gov, where subsidy applications must be processed, and less with the state exchanges. Shane Cruz, CTO of online broker GoHealth, said that small efforts on the exchanges' part could reap "huge rewards. We just need a couple of integration points to allow us to do our job."

Samuel Gibbs, a longtime eHealth executive now with aggregate online broker Healthpocket, forecast that the government exchanges "will have to work with brokers" to reach all of the uninsured. He suggested that the exchanges would evolve toward a "franchise model" with private brokers: "if you're going to be competitive, you can't own all the stores." (Private partnerships can have long tentacles: Cruz noted that GoHealth, which he said enrolled nearly a half million people in ACA exchange plans in 2015, has partnerships with H&R Block and Walgreens.)  Like Krishnan, Gibbs stressed that to be sustainable, the exchanges had to work well on mobile devices.

The web-based entity execs also touted their marketing and customer service prowess. When working with a government exchange, GetInsured's Krishnan claimed, "we can predict how many we can send."  Cruz stressed that brokers have a financial interest not only in getting people enrolled, but making sure that they continue paying and stay with a plan. As brokers, he said, the web-based entities can create a relationship with the customer. "We can't get paid just sticking people in a plan. We can help them select primary care physician,  make appointments, help with prescription optimization."

An undertow toward simplicity?

Simplicity of plan design may yet have its day. Peter Lee, executive director of the California exchange, emphasized that California has a standard benefit design for each metal level -- the same copays for the same services. That's in marked contrast to many markets, where the same insurer may offer several plans at the same metal level, slicing and dicing the deductible and copays several ways. In the same session, Katherine Hempstead of thr Robert Wood Johnson Foundation forecast that plan design would get simpler as the exchanges evolve. Meanwhile, RWJF is sponsoring contests to stimulate development of decision support tools -- for out-of-pocket costs, doctor selection, and drug formularies.

For all the worry about complexity of choice, it's worth noting that ACA exchange customers did not identify it as a problem in the most recent Kaiser Family Foundation survey. Responders were asked, "when shopping for a health plan this year, do you think you had too many or too few plans to choose from or was the number about right?" Just 10% answered "too many"; 59% said the number of plans available was about right.

In fact, the number of plans on offer varies widely within ACA markets. In Chicago, 143 plans are listed (52 silver, if you've selected your metal level); in Biloxi, Mississippi, just 24 (six silver). For the 87% of buyers who qualify for premium subsidies, the plans offered at a price deemed affordable probably usually boil down to a handful.

For the two thirds of exchange customers whose household incomes are below 200% of the Federal Poverty Level, the choice is -- or should be -- simpler. Those buyers are eligible for strong Cost Sharing Reduction subsidies that reduce out-of-pocket expenses -- but only if they buy silver plans. The exchanges do not do a great job making this point clear -- some are much better than others -- but more than 80% of buyers under 200% FPL do choose silver (at least in the 37 states that use healthcare.gov; state exchanges do a bit worse on average on this front). At low income levels in particular, only a handful of silver plans are likely to be available.

Still, the multiplicity of plans in a market like Chicago, where IlliniCare Health offers more than 20 silver plans, most within  a few dollars of each other, is a bit ridiculous. For most customers, however, cost is more of a concern than the level of choice. As former Director of the Office of Health Insurance Exchanges at HHS Joel Ario, now with Manatt Health Consulting,  pointed out at the HIX Summit, the exchanges have done a better job reaching and satisfying lower-income buyers -than those at higher levels. That's partly because the choice is simplified by strong CSR at low income levels -- but also because coverage is more comprehensive and affordable, absolutely as well as relatively.

1 comment:

  1. My employer had ten navigators on site last year, and I talked with them a lot.
    The navigators were most needed not on policy choice, but for calculating subsidies.
    In MN there was pure Medicaid, then a state run subsidy, then the ACA, then those above the ACA for income.

    Not simple!

    The Swiss may have much simpler rules for premium support.