Health plan shoppers using one of the insurance exchanges supported or run by the federal government may get a taste of what Californians have been able to do since the Covered California marketplace opened its doors in 2014: make apples-to-apples comparisons across plans.
The U.S. government is encouraging insurers to offer “simple choice plans” in states that use the federal website, healthcare.gov, during the upcoming open enrollment period from Nov. 1 to Jan. 31. The health insurance plans will fit into six standardized plan designs, falling under the bronze, silver and gold levels, as well as three additional silver options.
Since it launched in 2014, California’s state-run marketplace has decided the copays, deductibles and other benefits offered by health plans. No alternative mix of benefits is available for individual buyers in the state’s subsidized exchange. That gives consumers the ability to do a straight price comparison between otherwise identical plans.
“We want to make sure every consumer has good choice but not infinite choice,” Covered California Executive Director Peter Lee said in an interview earlier this year before the federal marketplace rules were finalized.
Now the federal exchange is adopting a similar concept to make it easier to pick a health plan for 2017 through healthcare.gov. Plans with standardized benefits will have the same deductibles and annual limits on out-of-pocket spending, and many of the copays and coinsurance payments for medical services will be standardized as well.
But unlike California, the federal government is allowing health insurers to offer other plans that don’t conform to the standardized ones. The same rules apply in most state-based marketplaces as well: Insurers are allowed to offer other kinds of health plans, even if they offer the standardized plans.
In healthcare.gov’s simple choice silver plan next year, the deductible will be $3,500 and the maximum out-of-pocket amount for the year will be $7,100. For many specific services, consumers will have fixed copayments for services up front rather than having to meet their deductible before the plan picks up any of the tab. Some of these include primary care visits ($30), specialist visits ($65), urgent care ($75) and generic drugs ($15).
Offering both standardized and non-standardized plans can present a challenge for consumers, say experts. Both need to be clearly differentiated online or consumers will have no easier time comparison shopping than before, said Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms who coauthored a recent report examining state efforts to offer standardized plans.
“It’s really important to get the consumer shopping experience right, otherwise you might as well not bother” with standardized plans, she said.
When the administration announced the simple choice plans in April, Kevin Counihan, CEO of the healthcare.gov marketplace, said the plans would “display prominently” on the website and have “clear visual cues” that would distinguish the simple choice plans from others.
A CMS official said there was no further information available at this time about how the plans will be displayed this fall.
In addition to potentially helping consumers wade through a bewildering array of options, standardized plans make it harder for insurers to design plans to be less attractive to people with expensive health care conditions, said Corlette. Insurers may be limited in their ability to make certain types of specialist care or drugs more expensive, for example.
Behavioral economics research tells us that simplifying consumer choices helps people make better ones. It makes sense that it will work with marketplace plans, too, but at this time that’s an unknown.
“We don’t yet know that standardized benefit design will help people make better choices and get into the plan that’s right for them,” Corlette said.
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