Health Insurance and You!

During the past year, we’ve posted several times on the progress that states and the federal government are making in setting rules for, building, and starting to market the online health insurance exchanges that were a hallmark of the health reform law. The exchanges, which will open for enrollment in October, are generally seen as a good new resource for individuals and families who lack access to employer-sponsored coverage, and states have been working quickly to get them up and running in time.

Given this progress, it may be easy to forget that in addition to individuals and families, small businesses are another target group for the exchanges. The Small Business Health Options Program (SHOP), also established through the 2010 health law, was created to give workers at small businesses a choice of health insurance plans. Like the individual market exchanges, SHOP will allow consumers to directly compare plans and prices, as well as aggregate and simplify enrollment and payment, according to a fact sheet on the program from Healthcare.gov. Premiums for SHOP plans will vary only by age and smoking status, and won’t be affected by the size of the business. States have the option of keeping the individual and small business exchanges separate or merging them into one program.

SHOP exchanges were originally scheduled to open next January, but, writes Robert Pear in an article for the New York Times, federal officials have decided to postpone its launch by one year. Citing operational challenges as a reason for the delay, states will have to give small business employees only one choice of plan in 2014, with broader options available in 2015.

Drew Armstrong, in a piece for Bloomberg, explains that the delay applies only to the states using the federal exchange, not those running their own exchange. While the federal requirement to provide choices has been delayed, many states with state-run exchanges are planning to provide them anyway, according to an article by Kelly Kennedy of USA Today.

Small business associations and advocates largely criticized the delay, explaining that small business plans were a major selling point of the health law to them. Health coverage is a big expense for small businesses, which have fewer employees among whom to divide the risk. Having a choice between several plans would push down premiums through competition and allow employees to get exactly the coverage they want, added a small business owner quoted in Mr. Pear’s article.

Health insurance companies, however, cited the challenges that Massachusetts experienced in setting up an exchange for employees that provided choices. Given that the Department of Health and Human Services (HHS) did not release detailed guidelines on SHOP exchanges until last month, states may not have enough time to use that guidance and launch by next year.

Readers, do you or your loved ones work in a small business? If so, are you planning to get coverage through a SHOP exchange next year or sometime in the future?

As health reform moves toward full implementation – with online health insurance exchanges opening for enrollment in October and an expansion to Medicaid eligibility coming soon to several states – there is a growing push by insurance companies and states to reach new consumers and get them enrolled. States are trying a variety of strategies to reach these emerging markets and facing some challenges along the way.

In Los Angeles County, for example, writes Anna Gorman of the Los Angeles Times, the county’s health care system has teamed up with the nonprofit organization OneLA to reach potential consumers where they already are. This strategy includes holding insurance enrollment events at places like churches, schools, and community groups. According to Ms. Gorman, much of the effort is coming from trained volunteers, who are making the enrollment process more efficient by identifying potential consumers through religious organizations and pre-screening them for enrollment in either Medi-Cal or Healthy Way LA, a temporary program for those who are not yet eligible for Medicaid but will be under the expansion. Volunteers are also helping to connect patients to clinics near their homes.

Elsewhere in California, writes Leslie Griffy of the California Health Report, officials are working to build a network of nonprofits and businesses that can work together to market the new insurance options to potential consumers. They’re still working on strategies for how best to reach consumers through events and local media, but hope that the more informed consumers are by enrollment time, the more likely they will be to put in the effort to find the right plan for them and enroll.

In Connecticut, outreach and marketing efforts for the state’s health insurance exchange are going full steam ahead, according to an article by Phil Galewitz of Kaiser Health News. Ads for TV, newspapers, and billboards are in the works. Officials also plan to work with providers to identify potential consumers – people who are currently uninsured – when they seek care at community health centers and other clinics, as well as through community groups and local businesses. As the weather warms and outdoor events become more common, the state also plans to have booths at festivals and street fairs. Small businesses, whose employees will soon have access to small-business plans, are yet another target for insurers and the state.

But there are challenges. Studies show that people without health insurance are less likely to seek health care, which makes it harder to find them and encourage them to enroll through the traditional medical system. Depending on income level and eligibility for subsidies, health coverage may be a hard sell for potential consumers who find insurance too expensive. And language barriers are another challenge – one that hits at multiple points in the enrollment process, explains Donna Gordon Blankinship in an article for the Associated Press. Not only are ads and other marketing efforts in English less accessible to non-English-speakers, but even the enrollment process and the medical system in general are harder to navigate. Washington’s exchange staff are working with local groups to address this issue.

Readers, have you noticed any health insurance exchange or Medicaid outreach efforts in your state? If so, what have you seen?

Yesterday, global marketing research company J.D. Power and Associates published the results of its 2013 Member Health Plan survey, which measures consumers’ satisfaction with their health insurance plans across the United States. According to the company’s press release on the survey results:

• Overall satisfaction has not changed much, decreasing very slightly from 702 out of 1,000 in 2012 to 701 in 2013.
• 59% of survey respondents had only one choice of health insurance plan when enrolling.
• 51% of respondents reported an increase in their premiums during the past year.

The survey noted a growing interest in enrolling in coverage through online health insurance exchanges, a key part of the 2010 health reform law. Overall, 43% of survey respondents were interested in using a state exchange, though that number varied widely between different groups of participants. Among people in the individual health insurance market, for example, 73% “probably” or “definitely” plan to shop for coverage via exchanges when they debut in October. Among people with employer-sponsored coverage, those working at small companies were most interested in exchanges (53%), followed by employees of medium-sized (48%) and large (43%) companies. According to an article by Dennis Domrzalski of Albuquerque Business First, people with more choices of employer-sponsored coverage were less interested in exchanges, with 50% of those with only one choice of plan expressing interest, compared with 36% of those with two or more choices.

Interest in exchanges also varied among people with different types of coverage. Health insurance exchanges were more popular among consumers currently enrolled in a high-deductible health plan, of whom 59% reported interest in the new systems, than those in more traditional, low-deductible plans, of whom 45% were interested. This could be because high-deductible plan members, who are more immediately affected by the prices of treatment, are more aware of what their coverage buys them and more inclined to find ways to control their health expenses, the J.D. Power analysts explain.

The results were based on a survey of more than 33,000 members of 136 health plans in 17 regions across the United States.

Readers, do you plan to try out the health insurance exchanges later this year and in 2014? Why or why not?

Last year, the Department of Health and Human Services (HHS) released a list of ten broad categories of ‘essential’ health benefits: types of treatments and services that all new health insurance plans would be required to cover. Among the essential categories were emergency care, hospitalization, maternity and newborn care, dental and vision care for children, and preventive care. The overall goal was to ensure that all plans covered a certain baseline level of treatment and to allow consumers to more accurately compare the costs and benefits of a particular plan.

Though HHS did provide this general guidance, it stopped short of specifying exactly which benefits fell into each category, opting instead to leave that decision up to the states. In order to be sold on a state’s health insurance exchange, individual and small business market plans would have to cover all of that state’s essential benefits.

Hoping to disrupt the market as little as possible, many states decided to designate a plan popular in the state as a benchmark plan, requiring other plans to cover all treatments and services that the benchmark covered. This has resulted in wide variation between states’ definitions of essential benefits. For example, coverage for autism treatment, acupuncture, and bariatric surgery differs between the states.

On Wednesday, HHS released its final rule on essential health benefits. In general, writes David Morgan in an article for Reuters, the rule had no major changes from previous iterations, and states would continue to be the main regulators of the health insurance market. Insurance companies repeated their warning to consumers that making coverage more comprehensive would drive up premiums. Mr. Morgan quotes one insurance executive who considers plans to be sold via the exchanges as a new category of coverage that is more comprehensive than plans on the market today – likely with prices to match. With the varied coverage requirements involved, not all insurance companies plan to participate in all state exchanges.

Notably, the new rule does require plans sold on exchanges to cover mental health and substance abuse treatment, writes Robert Pear in an article for the New York Times. According to federal officials, the rule will allow 32 million people access to mental health care and improve the care available to 30 million more. Currently, almost 1 in 5 people with individual health insurance do not have coverage for mental health treatment and almost 1 in 3 lack coverage for substance abuse treatment.

In addition to defining essential benefits for plans sold on the exchange, the final rule also sets levels of coverage, prevents discrimination based on age or preexisting health conditions, and elaborates on prescription drug coverage, according to an article by Kelly Kennedy of USA Today. It also clarified questions of how and when procedures could be coded and classified, with the goal of reducing surprise medical bills. These provisions and others came from more than 11,000 comments that HHS received from the public and various stakeholders on the draft version of the rule, which was published in November.

Previous coverage of this topic on our blog:

• Oct. 1, 2012: States Begin Defining Essential Health Benefits for Exchanges
• Sept. 4, 2012: California Considers Essential Health Benefits, Insurance Premiums for Smokers
• Oct. 11, 2011: IOM and HHS Work to Define What Health Benefits are Essentia

For health insurance companies, patients in good health with healthy lifestyles are the ideal customers – chances are, the insurer won’t have to pay for much beyond preventive care or the occasional unexpected health event, and their premiums can go toward the more expensive care of sicker people. Traditionally, insurers have wooed these healthy customers by offering them lower premiums. In recent years, insurers (and larger employers) have taken a more aggressive approach by trying to actually improve their customers’ health through wellness programs and incentives to practice healthy habits like exercising or quitting smoking.

Integrating Technology Into Health Management

In a post for the Health Care Blog, Mike Miesen wonders if that strategy can be taken further as health insurance exchanges debut and technology becomes more and more integrated into people’s everyday habits and specifically, how they manage their health. He reasons that Millennials, the generation that is now entering adulthood and joining the workforce, could be a particular target of these efforts for two reasons. First, they are less likely than older adults to have health coverage; they make up 22% of the U.S. population but account for 38% of the uninsured, Mr. Miesen notes. Second, they are known for being technologically savvy, with mobile phones, social networks, and other digital communication playing a big role in their lives.

For these reasons, Millennials would likely be open to products that use technology to track and improve health. One example would be an automated system that reminds patients via text message to take their medication or otherwise stick to a treatment plan, and alerts their doctor when they fail to do so. Others include mobile and social networking apps that help users track their workouts or cigarette use and receive encouragement from friends to maintain healthy habits. Ideally, these systems would work with as little work as possible on the part of the user.

Recent data shows that use of these tracking systems is high – and growing. According to a report released last month by the Pew Internet & American Life Project, 69% of adults track at least one health indicator, such as diet, exercise, or blood pressure, for themselves or a loved one. People with chronic diseases are more likely to track non-weight-related indicators than those without them. Of those who track any aspect of their health, 21% use technology to do it.

Interestingly, older adults are more likely than younger ones to track their weight-related health, 71% of people age 65 or older compared with 61% of those age 18 to 29. However, younger adults are more likely to use mobile apps or other tools to do so: 16% of people age 18 to 29 who track any aspect of their health use their cell phones, compared with 1% of those age 65 or older.

Moving From Data To Action

While most people who track their health keep the data to themselves, about one-third share it with others. A little more than half (52%) of those who share the information share it with a doctor, suggesting that while privacy is an issue for many, at least part of the population would be open to tech-based systems that share results with a health provider. Whether this openness would extend to health insurance companies and online exchanges remains to be seen, but it’s likely that establishing the needed trust would take some work and time.

The Pew data shows that tracking may be beneficial even for people who don’t choose to share their health data; nearly half of those surveyed (46%) say that it has changed their approach to their own health or that of a loved one, and 40% say that it has informed the topics they address with their doctor during appointments. As of now, it’s uncertain whether these changes have resulted in improved health, better patient satisfaction, or lowered medical costs, but one would expect that they could.

Readers, do you use technology or other methods to track your own health? If so, how open would you be to sharing the results with your doctor or health insurer?

High-risk health insurance pools, some created by the 2010 health reform law and some state programs that have existed for years, were designed to cover people with preexisting health conditions who had no other option for health insurance – people without access to employer-sponsored coverage who, due to their health status, had also been turned down in the individual market. A safety net existed for children caught in this scenario – child-only health insurance plans, which have dedicated open enrollment periods every year – but for many of the adults who had been declined coverage, the high-risk plans that were available cost too much.

According to an article by Brett Norman of Politico, about 300,000 people across the country are currently enrolled in such plans, about two-thirds of them in state programs and the remaining third in plans created by health reform. But the plans were always supposed to be temporary. Now, as we move closer to the debut of online health insurance exchanges, the idea was that people enrolled in high-risk plans would be transferred to plans sold via exchanges. The transfer would happen gradually, Mr. Norman explains, to keep premiums from spiking as patients with costly conditions enrolled. Such a spike might trigger healthier people, whose premiums fund the care of those who end up needing it, to decide not to enroll, which could create a vicious cycle of premiums escalating and consumers dropping coverage. Health reform included limits on how low premiums for the healthiest consumers could be in relation to premiums for the sickest, adding to the risk of such a vicious cycle since healthy consumers can no longer be wooed with extremely cheap premiums.

Thus, a slow transfer was the goal – until the Department of Health and Human Services (HHS) announced a $20 billion reinsurance fund designed to stabilize the finances of health insurance companies as consumers with preexisting conditions transitioned to plans sold via the exchange. Now, hoping to access part of that $20 billion, health insurers are hoping to have all of their high-risk plan enrollees switch over as the exchanges open.

Estimates vary over what kind of impact a sudden influx of high-risk plan enrollees would have on premiums for everyone else. Mr. Norman quotes one study that predicts an average rise in premiums of 45%. Others expect the effect to be smaller since exchanges will be flooded with millions of new customers in their first few months, and the sheer number of new customers could offset the impact of a smaller number of high-risk plan enrollees.

Another question is how far the reinsurance fund will go in keeping insurers’ finances intact. HHS anticipates that it will lower individual market premiums by about 10-15% – but of course, that’s an average, and the ups or downs of any particular plan’s costs could be much more significant.

Readers, are you or a loved one enrolled in a high-risk health insurance plan? How have these plans affected your ability to get affordable coverage, and has it improved in the past few years?

For more on the inception and evolution of preexisting condition health insurance plans, see:

• July 23, 2012: Health Reform’s Impact on Care for Patients with HIV/AIDS
• February 27, 2012: Cost of High-Risk Health Insurance Pools is Higher Than Expected
• September 14, 2011: Boosting Awareness of and Enrollment In PCIPs
• June 6, 2011: Coming Soon to a PCIP Near You: Lower Premiums and Easier Enrollment
• March 22, 2011: A New Insurance Option for Consumers with Preexisting Health Conditions

Last year, health insurance planners in the state of Mississippi, led by Insurance Commissioner Mike Chaney, hired GetInsured.com to build its online insurance exchange and run a call center in Jackson to answer consumers’ questions. In all, the exchange is expected to help about 250,000 Mississippi residents gain health coverage. GetInsured is currently working to set up the exchange website, but, writes Phil Galewitz in an article for Kaiser Health News, reprinted by Healthcare Finance News, the future of the marketplace has now been brought into question.

Chaney and Mississippi Gov. Phil Bryant have been friends and belonged to the same political party (Republican) for years, but disagree on whether the state should create an exchange and otherwise proceed with implementing the health reform law, Mr. Galewitz explains. Bryant opposes the law as a whole, while Chaney feels that developing a state-based exchange will allow the state to comply with the law but tailor its system as much as possible to Mississippi’s residents.

A legal decision finalized earlier this month by the Mississippi Attorney General concluded that Chaney has the authority to establish and continue developing a state exchange, as he – along with partners like us – is currently doing. However, future steps in fully implementing the exchange will require the governor’s approval. For example, Mr. Galewitz writes, he controls the board of officials who manage state contracts, such as the contract with GetInsured.com. And Gov. Bryant has stated his intention to block the exchanges by blocking funds or using other mechanisms available to him.

Because of this impasse, Mississippi’s exchange is still waiting on preliminary approval from the Department of Health and Human Services.

Health insurance exchanges, a central part of the 2010 health reform law, are federal- or state-based, online systems that allow consumers to compare and enroll in health insurance plans. Private exchanges, such as GetInsured.com, have been around for some time, and comparison-shopping websites in general are a familiar concept to many.

But using the name ‘exchange’ to describe these systems has been met with some criticism since the law was passed. As David Williams of the Health Care Blog observes, the term brings to mind stock exchanges, in-store return policies, or bartering, and can be confusing.

According to an article by Sam Baker of The Hill, the Obama administration feels the same way. In the past few days, he writes, federal officials have suddenly dropped all mention of exchanges and started using the word ‘marketplaces’ instead. It’s unlikely that governors and policymakers who are opposed to the online systems or health reform in general will change their mind due to the name change, but the goal may simply be to reduce confusion among the public by using a more descriptive term.

It is worth noting that even before this change, many states came up with their own names to help brand and promote their fledgling marketplaces, such as the Massachusetts Health Connector and Cover California. Over the next several months, as the state and federal marketplaces are named and start operating, the question over what umbrella term to use will likely become less important.

Readers, what are your thoughts on this name change? Did you find the term ‘exchange’ confusing or otherwise lacking? Do you expect that changing the name of the systems will change how people feel about it?

This morning, the Department of Health and Human Services (HHS) relaunched Healthcare.gov, the department’s website on all things health reform, to include information for consumers on the federal health insurance marketplace. With exchange-based coverage scheduled to kick in next January, and plan sales set to begin in October, the new information aims to help consumers explore the different kinds of options that will be available and get a sense of what it will be like to shop for insurance on an exchange. The site already provides the basics of health insurance plans and the health law and how the upcoming changes will affect individuals.

By and large, consumers don’t yet know what to expect, writes Kelly S. Kennedy in an article for USA Today. Other obstacles to public acceptance of exchanges include previous experiences with health insurance companies and a hesitation to have the government involved in healthcare at all. But in the coming years, federal budget experts project that a large group of Americans will shop for coverage through the online exchanges – an estimated 25 million by 2022, according to Ms. Kennedy’s article.

In addition to federal exchange administrators, state exchange planners and insurance companies are also trying to get the word out. Earlier this week, we tweeted about innovative ways states are trying to market exchanges, such as running ads on the online radio website Pandora and pushing for TV show writers to mention exchanges in their plot lines. Once the exchanges are launched and consumers start using them to shop for coverage, states are planning ways to keep consumers informed throughout the shopping process. For example, Colorado is planning to hire and train a corps of health insurance navigators to guide consumers and help them choose among the plans available, according to an article by Katie Kerwin McCrimmon of Health Policy Solutions.

Readers, what do you think of the new HHS resource and other efforts by states to promote and explain exchanges? What kinds of questions remain?

Last month, states made their final decisions on whether to join the federal health insurance exchange or develop a state-based one. After submitting their initial exchange plans, a slew of states have been undergoing federal review and receiving preliminary approval on their plans during the past few weeks, with the first six being approved in mid-December.

Besides federal and state exchanges, an intermediate option is for states and the federal government to partner on an exchange, allowing states to take on the functions that they feel best able to handle – customer service, outreach, health insurance plan management, or market research, for example – and leave other tasks to federal administrators. State Partnership Exchanges, as these shared systems are called, are also a viable option for states that are moving toward developing their own exchanges but won’t have them ready to go by January 2014. On Friday, the Centers for Medicare and Medicaid Services (CMS), part of the Department of Health and Human Services (HHS), released its first set of guidelines on these hybrid exchanges.

The guidelines outline the ways in which states and the federal government can partner up and divide the work of building and running an exchange. In a State Plan Management Partnership Exchange, which take advantage of state officials’ knowledge of the insurance market in their state, states will certify health insurance plans to be sold via the exchange, make sure insurers and plans continue to meet its requirements, and monitor the quality of their services. In a State Consumer Partnership Exchange, which take advantage of state officials’ knowledge of their residents’ circumstances and needs, states will manage the customer service, outreach, education, and marketing aspects of their exchanges, including the role of insurance brokers and agents. For both types of hybrid systems, HHS will handle the functions that the states are not taking charge of. The CMS guidelines include deadlines, a suggested timeline, and a list of tasks for states choosing each approach.

States that opt for a Partnership Exchange will have until February 13, 2013 to declare their intention to do and submit an initial application describing how the system would work.