DSS has conducted numerous health insurance exchange / marketplace studies where consumers are guided through a virtual shopping exercise to evaluate and select a preferred health insurance plan. When the appropriate federal subsidies are in place and a wide range of product alternatives are offered, most consumers find something that they would be willing to purchase to cover themselves and their families. These studies are proprietary, so I cannot share any direct results here.
However, we recently added a simulated health insurance marketplace purchase to our quarterly DSS Health Care Engagement (HCEI) survey. In August 2013, we asked consumers 18 to 64 nationwide to evaluate the four metal tier products that will be offered on the Covered California marketplace beginning October 1, 2013. One Bronze, Silver, Gold and Platinum plan was made available to each consumer, with monthly premiums adjusted to reflect the individual’s age and their eligibility for federal subsidies. Those with incomes below 250% of the Federal Poverty Level (FPL) were shown a Silver plan with reduced cost sharing as appropriate (i.e. acturial values of 73% for those 200% – 250% of FPL, 87% for those 150% – 199% of FPL and 94% for those under 150% of FPL).
Brand names were removed from consideration to make this generic plan comparison extensible to the entire US. In this hypothetical insurance purchase, provider networks were assumed to always include the consumer’s preferred doctor in order to eliminate the strong resistance that most consumers have towards selecting plans that do not include their doctor. This assumption will not have much impact on the metal tier consumers actually choose if networks are broad and vary enough across carriers to allow individuals to find a combination of brand, network and metal tier that meets their needs. However, if Bronze plans regularly leverage very small networks that are unlikely to include the majority of consumers’ personal physicians or a particular carrier uses a narrow network across all metal tiers, the final product choice and metal tier could change significantly.
The results show that only 18% of eligible consumers would not consider purchasing one of the available plan designs. However, almost one-third of the uninsured (the primary target of health reform initiatives) indicated they would not purchase any of the available options, even though most of these uninsured individuals would receive substantial federal subsidies to help offset the monthly premiums.
The last chart below shows that over 60% of the lowest income group (those with incomes below 150% of the Federal Poverty Level) prefer the Silver plan design that has an actuarial value of 94% (meaning that the health plan pays 94% of authorized medical costs incurred). When income rises to 200% – 249% of FPL, the cost sharing for Silver plans and the available federal subsidy is reduced substantially, leaving only 28% who would prefer the Silver plan with 73% actuarial value and very little federal subsidy to help pay for monthly premium. The percentage of consumers likely to go uninsured is fairly consistent across income groups, except that the group receiving the smallest federal subsidies and no cost sharing on Silver plan designs (300% – 399% FPL) may experience the greatest financial burden, leaving 29% to declare they would go uninsured.