When Buying Insurance on the Exchanges, It Helps to Have Help10/18/13
FRIDAY, Oct. 18 (HealthDay News) -- You have to wade through a
lot of insurance jargon and be a skilled number-cruncher to choose
the right health insurance plan on the new health exchanges, health
literacy and consumer decision-making experts say.
By making informed choices, consumers not only help themselves,
they help drive overall health-plan quality, efficiency and
pricing, the experts pointed out.
But, many consumers are ill-prepared to make the best choices on
their own because they lack the necessary math skills or can't
accurately weigh their insurance risk, the experts noted. Plus, few
health insurance exchanges currently offer the kind of help that
many people need to make informed decisions.
"Comparing costs of plans is difficult," said Robert Krughoff, founder and president of the Washington, D.C.-based nonprofit Center for the Study of Services, and Consumers' CHECKBOOK, a publisher of health-plan ratings.
First consumers have to figure out whether, say, a $200
deductible with a $10,000 out-of-pocket limit is better than a
$1,000 deductible with a $3,000 out-of-pocket limit for them,
Krughoff explained. "Then you throw in different co-insurance rates
and different co-payments and consumers just can't put all that
together into a single number that they can compare," he said.
Even the language of insurance, with concepts like co-insurance
and tax credits, is confusing, the experts noted.
"We're asking people to do a lot of heavy lifting right now when it comes to things that (studies show are) very problematic for the general public," said Christina Zarcadoolas, a professor at the City University of New York's School of Public Health at Hunter College.
It will be up to the staffers providing toll-free hotline help
and the "navigators" who are offering one-on-one assistance to make
sense of it all for consumers, said Zarcadoolas, founder of the New
York Roundtable on Public Health Literacy. But when consumers don't
even know to ask if there's a "network" or whether they can see
their usual doctor, "we know that causes all kinds of problems,"
Consumers' math skills a concern
The new Internet-based health insurance exchanges opened for
business on Oct. 1 but stumbled out of the blocks. Computer
problems and unanticipated levels of website traffic made it
difficult, if not impossible, for many people to review their
health-plan options in the first week or two of open enrollment
under the Affordable Care Act. The law is the Obama
administration's controversial effort to bring health-care coverage
to an estimated 30 million uninsured Americans.
HealthCare.gov, the federally run website serving as the
exchange in 36 states, continues to experience the greatest level
Once consumers successfully log onto an exchange -- whether the
federally operated exchange or the 14 state-operated exchanges plus
Washington, D.C. -- the next challenge is sorting through the
coverage options available to them under the health reform law,
also known as "Obamacare."
Ellen Peters, a professor of psychology at Ohio State
University, said choosing a health plan involves financial
decisions that even people with health insurance don't have to make
very often. For the uninsured, the choices "may be quite
unfamiliar," she said.
Peters is the lead author of a July 2013 paper commissioned by
the Institute of Medicine's Roundtable on Health Literacy that
showed that only 8.6 percent of uninsured adults have proficient
"numeracy skills." These are defined as the math skills needed to
take full advantage of the online exchanges.
Most consumers can figure out the difference between two plans'
monthly premiums. But people need a greater level of math
proficiency to estimate total health-plan costs based on expected
health-care needs, the report noted.
'They were practically throwing darts'
Studies demonstrate ways to simplify the task by presenting
options to people in a way that will help them make better
Eric Johnson, co-director of Columbia University Business
School's Center for Decision Sciences, and Tom Baker, professor of
law and health sciences at the University of Pennsylvania, realized
some time ago that "choice architecture" would matter on the
exchanges. To test their hypothesis, the two academics and
colleagues in New York, Miami and Jerusalem set up several
experiments mimicking the decisions consumers have to make when
shopping on the exchanges.
When asked to choose the lowest-cost health plan from among four
or eight options, the study participants failed miserably, the
"In fact they practically couldn't do it at all. They were practically throwing darts," said Johnson, who expects their paper to be published shortly in a peer-reviewed journal.
On average, consumers could potentially lose $611 annually by
failing to choose the most cost-effective option, the study found.
"People seem to put more weight on the out-of-pocket costs and the
deductible than they do the premium," he explained.
When business school students were given the same task, they got
it right 73 percent of the time, often with the aid of
spreadsheets, the study found.
Ordinary consumers either don't know how to do the math or don't
bother to do it, Johnson reasoned. The problem could be cured "just
doing the math for people," he said.
Because many of the health plans that consumers will purchase on
the exchanges will qualify for federal subsidies, peoples' bad
decisions could end up costing taxpayers more than $9 billion
annually, Johnson said.
The study also found that adding a cost calculator improved the
chances of choosing the right plan and reduced the margin for error
by an average of $216 annually. And using a "smart default" to
indicate a person's best health-plan choice based on his or her
specifications can also help, Johnson said.
Some exchanges more user-friendly than others
Currently, experts don't see many exchanges using these
"They've obviously been busy just trying to get the lights on October 1st," Johnson said.
Health Affairs, Krughoff and his colleagues suggest a list
of ways to make health-plan choices easier. One recommendation: let
users see the true insurance value of each plan. The exchanges
should provide a single dollar-amount estimate of the average
expected cost under each plan, Krughoff said. But based on visits
to about half of the exchanges in the past two weeks, he found that
few are doing so.
Several states, like Massachusetts, plan to add a
cost-comparison tool, Krughoff said. And Kentucky has one allowing
users to plug in data on their expected health-care uses, but it
ignores the unexpected accidents and illnesses that insurance is
designed to protect against, he explained.
But for the most part, "consumers will not have the tools that
they need to make their best choices," he said.
City University of New York's Zarcadoolas, though, believes that
consumer decision-making tools on the exchanges will improve over
time. "This is a dynamic process where the sites are going to be
constantly updated to be more accessible and more user-friendly,"
The Henry J. Kaiser Family Foundation has tools and information
to help consumers
understand the Affordable Care Act.
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