In May 2014, the consulting firm McKinsey and Co.
published a series of articles about consumer behavior on the public healthcare
exchanges. Their studies reveal several interesting insights, and I've pulled out a few here to share / comment on (you can find the full suite of articles here.):
- Perceived affordability was the reason most often given
for not enrolling by both previously insured and previously uninsured
respondents. About 90 percent of all those citing perceived affordability
challenges were subsidy-eligible, and among these subsidy-eligible
respondents, awareness of the subsidies has remained low. (For example, 66
percent of the April respondents and 65 percent of the February
respondents who were subsidy-eligible and who reported that they had
shopped but did not enroll because of affordability concerns were unaware
of their eligibility). Among previously uninsured, subsidy-eligible
respondents, those who indicated that they were aware of the subsidies
were almost three times as likely to have reported enrolling as those who
were unaware.
- There seems to be a recurring theme in many of
McKinsey’s observations, which is the fact that consumer education /
understanding of how the Exchanges work is very low. Subsidized plans is a key provision for
many of the consumers that the Exchange is meant to target. It seems to me the success of these
Exchanges is largely contingent upon awareness and education of how it
actually works!
- Narrowed networks are available to 92 percent of that
population; they make up about half (48 percent) of all exchange networks
across the U.S. and 60 percent of the networks in the largest city in each
state. The increased prevalence of narrowed networks gives consumers a
wider range of value propositions and prices among health insurance plans.
But, if a consumer purchases a narrowed network product, then at the point
of access, the choice of providers is reduced. Compared to plans with
narrowed networks, products with broad networks have a median increase in
premiums of 13 to 17 percent (when the analysis is controlled for payor,
product type, rating area, and metal tier); the maximum increase is 53
percent. Across the country, close to 70 percent of the lowest- price
products are built around narrow, ultra-narrow, or tiered networks.
- They’re here!
Narrow, and ultra narrow networks.
I wasn’t even aware that Ultra-Narrows existed (defined as
inclusive of less than 30% of a defined geography’s / rating area’s providers). It will be interesting to see how this
plays out over the next year – will consumers be disappointed at the point of access? I'm sure this will largely vary by consumer segment. Additionally, for those with more
complex medical conditions, what will happen if they need to go out of
network for care? Do the design of
these narrow networks include provisions for outlier circumstances? I remember a narrow network-like
offering in Boston inclusive of a contract with Mass Gen that allowed
patients to utilize the health system’s services for highly complex cases
that could not be addressed in-network
- In our April consumer survey, 42 percent of the
respondents who indicated they had enrolled in an ACA plan and were aware
of the network type reported purchasing a product with a narrowed network.
However, 26 percent of those who indicated they had enrolled in an ACA
plan were unaware of the network type they had selected.
- Again, the education theme comes up – will be interesting to see how consumers respond to satisfaction with narrow network plans. And what is the Exchange sign-up process like, and how can it be improved so purchasers are made more aware of what they are actually getting