In the first article of our series on the Notice of Benefit and Payment issued by the Department of Health and Human Services (HHS) in August, we went over the risk adjustment program, which is a major incentive for insurers that participate in federal and state marketplaces. Assessing risk is essential to setting insurance rates and in turn passing those rates on to consumers. What you pay for health insurance each month largely depends on the risk pool.
But monthly premiums and coinsurance rates aren’t the only things that matter when you’re shopping for health insurance. As a consumer, you want to make sure that you’re getting the best deal for the coverage that you actually need. In 2017, the HHS and the Centers for Medicare and Medicaid Services are pushing for better access and better user experience on and off the marketplaces. The department’s notice discusses the need for improvement when it comes to using the exchanges and buying health insurance in general. In this post, we’ll go over some of the proposed changes to make user experience better going forward.
Improving Consumer Access and Experience
In addition to making health insurance affordable, the ACA has been working to make sure that insurance is accessible. This is why marketplaces were opened in the first place. State and federal health insurance exchange sites make it easy for consumers to shop for coverage, compare policies and see what they’re paying for ahead of time. In 2017, the HHS wants to improve consumer access and user experience on and off the exchanges. Several proposed rule changes will strengthen this aspect of health insurance enrollment, including:
- Giving enrollees additional tools to help them assess networks among competing plans
- Accommodating state cost-sharing rules to allow for broader access to the new standardized plan options for this year
- Creating consumer protections for those who enroll via a direct enrollment channel
- Mitigating the effect of higher-cost insurance for young adults who turn 21
Comparing plans has been one of the key benefits on state and federal exchange sites because it enables consumers to make more informed decisions about their health insurance. A proposed rule for next year would give consumers more tools for assessing networks. In some states, the CMS has already introduced a pilot program on these new tools.
Also new for 2017, the CMS has proposed standardized plan options on the marketplace called the Simple Choice plan. There are three sets of six standardized plans. At the bronze tier, it’s a basic health insurance plan with a very high deductible that can be used with a Health Savings Account. Like other major medical plans under the ACA, the Simple Choice plan will cover preventive services without any cost sharing. The standardized plan will only have to cover one major service — like a trip to the ER — before the deductible is reached, making it a potentially good option for people with limited medical needs. Younger, healthier enrollees are the primary target for enrollment, and these new plans may encourage more young consumers to sign up for health insurance.
When it comes to enrollment, consumers have more options under the ACA than they did before the marketplaces opened. In addition to using state or federal exchange sites, you can enroll in a health plan directly through an insurer’s website, via a broker’s site or through an independent health insurance enrollment site. Right now, if you were to visit an enrollment site outside of a state or federal exchange, you would be redirected to HealthCare.gov to complete the eligibility portion of the application process.
The proposed rule would change this step. Instead of being redirected to the federal exchange site, consumers would be able to stay on the site that they’re on for the duration of the signup process. This would streamline enrollment for many people, making it easier and less burdensome to apply for coverage. Other improvements to the direct enrollment process would also make web-brokers more accountable to their client base while encouraging greater transparency throughout the enrollment process.
One other important change centers on young adults who turn 21. As it stands right now, when a health insurance enrollee reaches age 21, premium rates can increase by a whopping 57 percent. This drastic jump in premium rate can be financially difficult, especially for families whose adult dependents are still enrolled in a family plan. To make things easier on consumers, the CMS is proposing to create multiple child bands to ease the transition into the higher premium rates.
The proposed rule change would not only help to mitigate the sudden increase in health care premiums for young adults, but it would also more accurately reflect health care costs in children. Claims costs are highest for children from birth to 4 years and lowest from age 5 to 14. New age bands would result in more expensive insurance for children and less expensive coverage for adults. This change also would be left up to the states to determine their own age rating curves.