Tuesday, July 08, 2014

Whaddaya mean, you didn't know about the subsidy? --Improving healthcare.gov

Once healthcare.gov stopped crashing, how successful was it in transmitting the most basic information to most users -- how much they'd be likely to pay in monthly premiums, and how much in out-of-pocket costs they'd be on the hook for?

My sense from late December on was that the website's shop-around feature, enabling a user to get that basic information without registering or applying, worked reasonably well. I used it all the time to check premiums, deductibles and maximum out-of-pocket (OOP) costs for different ages, income levels and locations. You need to enter about eight pieces of information, including state and county, household size, household members' ages, and household income, to get a listing of available plans, ranked lowest premium to highest, and sortable by metal tier. Each plan summary clearly lists what you'll pay in premium, deductible and OOP max (if your income estimate is accurate). Cost Sharing Reduction (CSR) subsidies lowering deductibles and OOP, available to those earning under 250% of the Federal Poverty Level, are figured in.

And yet, many people who tried to use the site came away with no idea how much they would need to pay -- that is, how big a premium subsidy they eligible for, let alone CSR, or even that they were eligible for subsidies at all. A McKinsey study found that 72% of the respondents who reported that they shopped but did not buy were subsidy-eligible, and that 66% of subsidy-eligible respondents who cited perceived affordability as the reason they stopped shopping were aware of neither their eligibility nor the amount for which they were eligible. Their plight is illustrated by the tale of a newly retired Philadelphia cop who went online and concluded that insurance would cost her $800 per month, -- missing the subsidy that reduced the premium to $135.

In coming days, here or elsewhere, I'll report observations and thoughts from ACA navigators and other service providers as to what went wrong for various do-it-yourself shoppers. This week, healthcare scholars at the University of Pennsylvania led by Charlene Wong reported results from an in-depth study of the experiences and frustrations of well-educated young adult shoppers (aged 19-39) on healthcare.gov. Their suggestions for improvement include pop-up definitions of key terms where they appear (via mouse-over); can't-miss notice of the free preventive care and essential health benefits included in every policy; similarly can't-miss emphasis that CSR is available only with silver plans; better sorting tools, such as ranking plans by monthly or annual cost; and clear early notice that dental plans are sold separately.

Those are all good suggestions, and it seems to me that all of them would be as relevant for older and less educated users as for the highly educated study subjects.  Based on my own on-site-experience, I would add a couple more on a more basic level:.
  • Steer everybody to the shop-around feature first, prior to registration or application. In the first open season, this basic orienting function -- what's the least I can pay in monthly premium? -- what's the best mix of premium and deductible + oop? -- was easy to miss.  A button labeled "see plans before I apply" was one of three or four to choose from on the home page -- and that language does not make it clear that the feature will yield price quotes keyed to income. The shop-around feature should be the gateway to registration and application.

  • Make silver plan options the default, the first ones you see. At present, you see all plans in order of monthly premium, which means seeing bronze first. That makes the benchmark silver plan premium something of a downer when you get to it, if you get to it -- especially if you don't know what a deductible is. And as the U of P study subjects indicated, the tying of CSR to the silver tier should be emphasized at every step. I understand that once you actually start filling out an application, if you qualify for CSR and try to pick a bronze plan, you're warned that you'll forfeit the help with out-of-pocket costs. But the basic tradeoff between premium and OOP, specific to one's income, should be clear at the outset.
It's also true that insurance is a complex product, for many if not most of us best purchased with expert guidance, and that public funding for such guidance is not where it should be. But improvements to healthcare.gov and the state exchanges (most of which, in my experience, were mostly inferior in shop-around usability to healthcare.gov) could make a significant difference.

1 comment:

  1. Niether Social Security, nor Medicaid, nor Medicare itself, expects all recipients to navigate the programs exclusively on line.

    These programs have real offices with paid employees, and beneficiaries sit down and talk about their situation.

    Of course this costs more. What of it? Independent bookstores cost more than Amazon too.

    The ACA tried to get going on the cheap. (only in some states it was not even cheap, billions were wasted on computer consultants.)