Cheaper Insurance May Not Be the Answer to Improving Patient Outcomes
Newly insured consumers have begun to realize the full impact of low premium, high deductible insurance plans purchased on the Exchange — and they aren’t happy.
Between struggling to find providers in narrow networks and expensive co-pays, many Americans who purchased these plans are wondering why they bothered. They may have purchased lower cost plans, but they weren’t buying bottom tier. According to recent HHS data, 65 percent of newly insureds are struggling to find coverage with Silver plans, not lower cost Bronze options.
Yet, these troubles haven’t stopped politicians and lobbyists from proposing even skimpier Copper plans to entice more Americans to sign up for insurance. A proposal that seems to show just how out of touch American legislators seem to have become with consumers.
The c2b Consumer Diagnostic reinforces consumers’ prioritization of options over cost, as 60% of respondents in the national study preferred having plenty of choices versus lower cost of coverage.
However, when asked whether they preferred a high deductible/low co-pay or a low deductible/high co-pay plan, nearly half of the respondents could not answer the question. This underscores the need for education and improved health insurance literacy among consumers who are making these investment decisions.
If improved public health, and not simply a larger number of insured Americans, is the ultimate goal, the health care industry must focus on educating consumers on choosing plans that offer appropriate levels of coverage. By segmenting consumer populations, insurers and care organizations alike can create targeted messaging that reaches the desired consumers and guides their decisions so that they receive the care they need.
What is Fueling the Discontent?
The original range of plans offered on health insurance exchanges included five options for covering medical expenses:
- Platinum plans cover 90 percent
- Gold plans cover 80 percent
- Silver plans cover 70 percent
- Bronze plans cover 60 percent
- Catastrophic plans, for individuals 30 and younger, cover very limited services
Unfortunately, in a rising number of situations, insurance coverage isn’t meeting consumer expectations. While some of the disappointment may be a result of the newly insured not anticipating how their choice for a low monthly premium would impact the size of their co-pays and deductibles, even those with higher premium plans are feeling frustrated.
One couple who signed up for a gold plan HMO quickly discovered that the list of 28 obstetricians shown on the plan website was inaccurate. NPR reports that most of the listed providers did not accept the plan.
The patient told NPR, “I was just sitting there thinking: I’m paying close to $400 a month just for me to have insurance that doesn’t even work.”
After a frustrating search — and with her due date looming — the couple stopped paying the premium, opting instead for a less traditional approach. They paid $4,000 cash for a home birth, assisted by a midwife, and registered with a non-profit, cost-sharing organization they submit medical bills to for reimbursement.
The problems do not end with the patients.
Forbes recently reported that hospitals have experienced declining utilization rates as high deductible health plans force patients to “think twice about their health care purchases.”
It is not a positive sign for a major platform designed to transform health care by improving both affordability and patient outcomes.
What Does the New Proposal Involve?
Today’s catastrophic plans are not eligible for tax credits.
In an effort to attract young, healthy adults or those who have not yet purchased coverage on the federal or state exchanges due to price, legislators have proposed a lower cost catastrophic plan that covers 50 percent of medical expenses and would be eligible for tax credits.
Consumer advocates worry that such plans leave Americans exposed to medical expenses that could force them to make a difficult choice — get needed care and potentially bankrupt themselves or avoid seeking care.
Sabrina Corlette, project director at Georgetown University’s Center of Health Insurance Reforms, notes, “It’s a false promise of affordability. If you ever have to use the plan, you won’t be able to afford it.” Given the problems consumers are having with the current offerings, a copper plan may not be the best way to improve public health.
How can Segmenting Consumer Markets Help?
Health care providers and insurers need to help consumers navigate the process of purchasing and using health insurance.
In order to develop an effective health care marketing or education strategy, organizations need to dive deeper into the various types of consumers they encounter. By segmenting consumer markets, the health care industry can better understand the distinct needs of consumers based on:
Demographic and socioeconomic aspects including gender, age, ethnicity, income, education and geography
Behaviors related to healthcare utilization, medical claims, purchasing decisions
Shared attitudes and emotions about personal health and health care coverage
Psychographic segments based on shared principles, emotions, interests and lifestyle. For perspective, the c2b Consumer Diagnostic found significant differences among psychographic segments in the prioritization of costs versus choice in purchasing health insurance coverage.
With a more well-rounded view of consumers, organizations can implement programs that take a more personalized approach to patient care, offering education to help them choose and understand insurance coverage better, drive appropriate use of coverage, and attract consumers that are shopping based on quality and price.
Ultimately, it’s an approach that offers better patient outcomes than yet another low premium, high-risk insurance plan.