CA Exchange Website Could Spell Trouble for Insurers & Consumers

California Health InsuranceCalifornia Health Insurance BlogACACA Exchange Website Could Spell Trouble for Insurers & Consumers

CA Exchange Website Could Spell Trouble for Insurers & Consumers

On April 8th, 2013 Covered California/exchange/HBEX held a webinar for agents to describe their online enrollment process. Buried at the end of the presentation, slide 37 of 39 slides, was a screenshot of the page someone will see when he/she goes online to select a health insurance plan through Covered California.

Bad news for consumers who want a lot of choice and bad news for insurance companies who want to enroll new members: only 3 plans appear.

Using the phrase “the research shows” Covered California’s web usability consultant described how consumers do not want to view a long list of plans. Rather, they prefer to answer some questions about their preferences for a health insurance plan and let an algorithm narrow their choice to 3 plans.

The Covered California exchange web site will use “Smart Sort” that will ask you to rank in order of importance:

  1. a low monthly premium;
  2. a low deductible; and
  3. a low maximum out-of-pocket amount.

Once, you’ve made that selection, the web site prompts you with more detailed questions:

  • How often do you expect to see you primary care doctor in a year?
  • How often to you expect to see a specialist?
  • Are you pregnant or planning on having a baby this year?
  • Do you anticipate a major procedure this year?
  • Do you suffer from a major chronic illness?

Next, the “cost calculator” asks you to select the level of prescription drug use you expect for the upcoming year: Level 1 is no health problems with about 2 prescriptions per year – to – Level 4 with multiple prescriptions used daily and more than 30 prescriptions per year.

Armed with a consumer’s answers to these questions, the “cost algorithm” in the “cost calculator” returns a page with three plan options… Yes, 3 plans.

The plans are arranged in columns, again because the “research has shown that this is what consumers prefer.”  BenefitsCafe.com has helped thousands of people enroll for health insurance online and we have found that the limitation of showing the results in columns is that few plans can be displayed on the screen. The column format also makes it difficult for users to find different plans.

On BenefitsCafe.com we display plan results in row format which allows us to display 50 or more plans on a single page and it also enables consumers to easily sort through the plans.  Too many plan choices can be overwhelming and I have written about the paradox of offering too many choices of health insurance on this website. Still I feel that 3 plans is too few.

More importantly, pitty the poor insurance company whose plans appear when a member says he/she has a major chronic illness; takes 30 or more medications per year; and anticipates a major procedure this year. Presumably the same plans will appear for everyone.  This will result in all of the high utilizers being lumped into one or two or three plans.

Conversly, what about the insurance plans that appear when someone answers that they prefer a low premium, high deductible and seldom take prescription medicine. If the algorithm returns the same plans over and over, these insurance companies will likely make a ton of profit.

Previously, Covered California said that about 30 insurance companies have applied to be listed in the exchange. If each plan offers a Platinum, Gold, Silver, and Bronze level plan then 120 plans would be available. If all of the insurance companies offer a wide and narrow network of providers, then 240 plans will be available.  Some sorting is needed. Still, 3 plans is too few in my opinion.

Another interesting selection feature is a listing of “overal plan quality” shown with 1 to 4 stars.  On the call I asked for clarification: who will be rating “plan quality”? Members, insurance companies, Office of the Patient Advocate, “consumer advocates”… This seems to be a very subjective measurement and the web usability consultant provided no insight in her response.

Also, the size of a provider network is not a question in the “smart sort” system. The Covered California web results allows one to search for a provider, however, if someone is uninsured and does not have any doctor’s name to search for, he/she will not be able to determine whether all of the top hospitals and doctors are included in a plan’s network or not.

California’s exchange will only work if health insurance companies participate. If they know that they may end up will all of the bad risk while a competitor ends up with all of the good risk, the insurance companies will either reset their plan priorities to get better risk, or leave the exchange. If insurance companies lose money and exit the market entirely, consumers lose.  Hopefully, Covered California will tweak its system and enable a larger selection than 3 plans.