Consumer enrollment in exchanges faces challenges
A Gallup poll from a sample of 5,099 Americans taken September 17 through the 26 shows that while 65 percent of uninsured Americans plans on obtaining health insurance, only 48 percent of uninsured Americans intends to enroll in health insurance for 2014 through a state or federal health insurance exchange.
The poll, released September 30, 2013, asked Americans about their awareness of the Affordable Care Act and their anticipated healthcare decisions in the coming months. Some key findings include the following:
- Overall, 83 percent of Americans are aware that most Americans will be required to have health insurance coverage beginning in 2014. Among uninsured Americans, 68 percent are aware of the requirement, up 12 percent from a June survey.
- For those 18 to 29 years old, 69 percent are aware of the requirement to obtain health insurance or face a penalty, compared to 83 percent for those 30 to 49, 87 percent for those 65+, and 91 percent for those 50 to 64.
- 51 percent of uninsured Americans said they were “not at all familiar” with the exchanges, while only 5 percent of uninsured Americans responded as being “very familiar.”
PwC’s Health Research Institute, conducted interviews with insurance executives, consumer experts, and health policy leaders regarding exchange strategies and surveyed more than 100 executives to understand their plans, progress, and concerns related to participation on health insurance exchanges.
In a recent article, Insurers Face Significant Challenges in Attracting Consumers to New Exchanges, Finds PwC’s Health Research Institute Survey, it was reported that:
- 69 percent of insurers surveyed plan to participate on the exchanges; new exchange entrants will include Medicaid managed care companies, new health plans run by large provider systems, new Consumer Oriented and Operated Plans, and tech savvy start-ups.
- Only 34 percent of insurers said understanding customers was a major barrier to implementation.
- 91 percent of insurance executives expect customers to be concerned most with premium and out-of-pocket costs; while industry and consumer experts expect customers to value other factors, including personalized communication, tangible rewards, and health management programs.
“Organizations that are planning to offer coverage on the exchanges should prepare to compete in new ways to earn consumers’ business and loyalty,” said Sandra Hunt, principal with PwC’s Health Industries practice. “Transparency around pricing, quality and customer satisfaction should be foremost in their minds as consumers become much more aware of the cost of healthcare and how to access it.”
As insurers focus on offering lower prices to consumers, one method being implemented is the use of narrow networks. Insurers believe healthy consumers will choose to trade provider access in order to enroll in a lower premium plan; at the same time, these limited networks may discourage those with expensive health conditions from enrolling in these same plans.
A New York Times article, Lower Health Insurance Premiums to Come at Cost of Fewer Choices, addresses some of the positives and negatives associated with narrow provider networks. Adam M. Linker, a health policy analyst at the North Carolina Justice Center, a statewide advocacy group, stated that consumers should expect to see “much tighter, narrower networks” of providers.
“That can be positive for consumers if it holds down premiums and drives people to higher-quality providers,” Mr. Linker said. “But there is also a risk because, under some health plans, consumers can end up with astronomical costs if they go to providers outside the network.”
Some of the new exchange narrow networks do not include major medical centers; if a consumer has a complex medical issue that needs to be treated at a specific hospital and that hospital is not in the network, it could discourage those consumers from enrolling in the less costly, narrow network plan.
“If a health plan has a narrow network that excludes many doctors, that may shoo away patients with expensive pre-existing conditions who have established relationships with doctors,” said Mark E. Rust, the chairman of the national health care practice at Barnes & Thornburg, a law firm. “Some insurers do not want those patients who, for medical reasons, require a broad network of providers.”
While insurers focus on offering low prices in order to gain market share, they may need to place more attention on increasing enrollment through raising awareness and driving consumers to the exchanges to purchase coverage. Hospitals are one group playing a key role in enrolling consumers in health insurance coverage. While insurers are looking to enroll the young and health, many hospitals want to ensure those who are at risk of being unable to pay for their health care needs and those with high unpaid bills are enrolled.
According to a Kaiser Health News story produced in coordination with The Washington Post, some hospitals are conducting their own consumer education and outreach in order to enroll consumers in health insurance. Some hospitals are setting up phone hotlines while others are recruiting contractors to enroll consumers.
“This is a major project for the next year,” said Craig Cooper, spokesman for Genesis Health System of Iowa, which hopes to enroll thousands of patients and substantially cut its $60 million annual bill for people who can’t afford to pay for care. “It’s important to [the CEO] and it’s important to our organization.”
“Hospitals are now starting to focus on outreach programs to individuals who are [frequently admitted] and try to get them signed up for insurance, so when they do present to the hospital, they are covered,” said Jeff Silverman, a vice president at Emdeon Inc., whose business includes helping hospitals and academic medical centers manage revenue.
With the exchanges opening for enrollment on October 1, we will just have to wait and see how strategies to enroll healthy consumers and approaches aimed at enrolling consumers with more expensive health needs balance out.