Many health insurance Marketplace shoppers have a lot of choices — more than those of us with employer-sponsored coverage. For states participating in HealthCare.gov, the average number of plans offered for 2016 coverage is 48. After learning, from a recent study, how little help is available for most Marketplace consumers, I'm sure I'd be highly challenged and frustrated by the task of choosing among this many plans.
After all, choosing coverage is hard. As I've written in several, prior posts, many consumers make mistakes in doing so. But they can do a better job if they have the right tools. For example,
Eric Johnson [...] conducted a series of experiments on people similar to those who would shop for marketplace coverage. Each study participant was asked to presume he’d use a certain amount of health care and, based on that, to choose the lowest-cost plan from among eight choices, which varied by premium, doctor co-pay and deductible. Only 21 percent could accomplish this task, a figure not statistically different from chance. [...]
But when study subjects were provided with a tutorial or with a calculator that revealed the full cost of each plan, or if they were placed in the lowest-cost plan by default (from which they could voluntarily switch), their chance of selecting the cheapest plan was much higher, upward of 75 percent in some experiments.
But, not many Marketplaces provided tools and features like this for the 2016 coverage year (or earlier years). I know from experience how useful they could be. Because I am eligible to participate in the Federal Employees Health Benefits Program (FEHBP) I have more choices than most workers, though less than half as many as Marketplace shoppers. The several times I looked over my 20 or so choices I yearned for two things: (1) to filter out plans that did not include the doctors and hospitals my family prefers and drugs we take; (2) to rank order remaining plans by expected total cost to me (premium plus out of pocket costs) if my family's health care use remained about the same or if it grew substantially (e.g., if I or a family member got very sick).
Lacking those tools, I have stuck with my current plan for years. Switching, even though it might save me money, always seems like too much work and risk. So, I really feel for Marketplace shoppers.
For several years, Charlene Wong and other researchers at the University of Pennsylvania's Leonard Davis Institute have examined the choice architecture of state Marketplaces. Last year, they found only a few that provided some of the tools consumers need. For example, only three states offered cost estimators. Recently, Wong and colleagues looked at what tools were available for selecting plans for 2016. Among their findings:
- Estimates of total out of pocket costs were available only from two (of 13) state Marketplaces — California and Kentucky — during the "real" shopping phase. However, during "window shopping," such a tool was not available in California but was available for HealthCare.gov, Connecticut, District of Columbia, and Minnesota. (The "real" shopping phase is when consumers actually establish an account to select an enroll in plans; "window shopping" can be done before account creation.)
- Eight state Marketplaces (out of 13) and HealthCare.gov offered an integrated provider lookup (to readily find in-network providers without going to plan-specific websites), but only one could sort on provider inclusion and two could filter on it.
- Neither HealthCare.gov nor any state Marketplace offered an integrated drug lookup during the real shopping phase, but Colorado did so during window shopping.
- Two Marketplaces — Massachusetts and Rhode Island — provided some indication of network size.
Overall, these (and other results) represent progress form prior years. However, it may be confusing and inconvenient for consumers that some of platforms that provide certain tools only do so in the real or window shopping phases, but not both.
The authors wrote,
In the window-shopping experience, for example, the number of Marketplaces that offered total cost estimators increased from zero in the first enrollment period to five in the third, including HealthCare.gov for the first time. More Marketplaces had integrated provider lookups (there were three in the first enrollment period and eight in the third) and pop-up definitions (five and nine, respectively).
Most sites have continued to list plans by the premium amount. However, compared to previous enrollment periods, in the third period more sites were experimenting with alternative orders, including by estimated total out-of-pocket spending or with best-fitting or silver-tier plans first—especially for consumers who qualified for tax credits and cost-sharing reductions.
This is good, but more could be done. To be fair, it is not trivial to provide these tools. It requires planning, design, and implementation. That all costs money that some states may not have. Things will likely improve in future years. HealthCare.gov already announced that for the 2017 plan year, consumers will be able to select from “Simple Choice plans” that have a uniform structure, aiding comparisons. For example, deductibles and cost sharing won't vary across the plans (within metal tier).
Another way to make progress on helping consumers is to learn more about how they select plans and to what extent different tools help them do so. That could be done with data from Marketplaces or HealthCare.gov about their choices and how they make them. To date, such data are not available.