Claims Management News

Health Insurance Marketplaces Call for Plan Standardization

One Urban Institute report found that state-based health insurance marketplaces are investing in plan standardization to improve comparison shopping.

By Vera Gruessner

Healthcare payers are being instructed to offer standardized plan and benefit designs as the  federally facilitated health insurance marketplace is working to improve consumers’ ability to compare varying health plans during the next open enrollment period for 2017. A report from the Urban Institute called Missed Opportunities: State-Based Marketplaces Fail to Meet Stated Policy Goals of Standardized Benefit Designs finds that the federally facilitated health insurance marketplace will follow the lead of a number of state-based marketplaces.

Healthcare Price Transparency

Standardized health plans are considered to be a clear path toward enabling plan-to-plan comparisons for consumers. However, researchers from the Urban Institute found that certain state policies and website tools have kept the state-based health insurance marketplaces from reaching these goals.

The researchers conducted interviews of state officials as well as analyzed policy guidelines and website interfaces within the health insurance marketplaces located in Connecticut, Massachusetts, New York, and Oregon.

Healthcare payers operating in either state-based health insurance marketplaces and/or through employer-sponsored health plans would be wise to consider plan standardization as one way to improve consumers’ shopping experiences and ability to compare separate health plans.

The researchers found that all interviewed officials from the state-based health insurance marketplaces held similar policy goals that health plan standardization would improve consumers’ experiences with comparing insurance benefits.

The health insurance marketplace in Massachusetts was the first one out of the analyzed states to standardize health plan benefits. The other health insurance marketplaces also outlined a goal of “apples-to-apples” comparisons among plan benefits and the importance of standardization.

In Oregon, the state-based health insurance marketplace emphasized the need to narrow consumer interests into specifically the price and quality of health plan. Insurance stakeholders were also interviewed and mentioned the value of standardization as well as the need to enable consumers to understand their options.

Health payers participating in these four state-based health insurance marketplaces will need to provide gold, silver, and bronze health plans in order to enable “apples-to-apples” health plan comparisons among consumers for the 2017 open enrollment period.

State policymakers also emphasized that health payers are “in the best position” to innovate in cost sharing and design effective plan benefits. While state officials emphasize standardization, health payers have argued that keeping nonstandardized options will help maintain their competitive stance and allow greater differentiation between the insurers.

Nonetheless, health payers will be able to compete on specific areas like their overall provider network, pricing, customer service, and quality ratings, the Urban Institute report stated.

Price comparison could improve health plan shopping for consumers and lead to greater patient satisfaction. Consumer advocates have emphasized the importance of price transparency in recent years and how payers could incorporate more clarity on cost sharing within their plans.

With more healthcare payers and providers moving toward value-based care reimbursement such as bundled payment models or shared savings, improving price transparency on cost sharing such as deductibles could enable payers to gain greater customer loyalty and compete more effectively in the health insurance marketplace.

Ellen Gagnon, Senior Project Director for the Network for Regional Healthcare Improvement, spoke with HealthPayerIntelligence.com about her work on improving total cost of care transparency.

“Given the move from volume to value-based payments, there is more desire from providers to better understand total cost of care. We will continue to work with our physicians and payers to support them in this effort. Part of our work ahead in 2016 is how to better package what we’ve learned in a way that’s more easily consumed by regions interested in cost of care,” Gagnon explained.

“We believe it’s not just a measure,” Ellen Gagnon continued. “It’s an approach to establishing a measurement program by working very collaboratively within your community, and seeking input all along the way on how it can be useful. Our approach is focused on engaging all stakeholders in the community.”

Essentially, both payers and providers can offer more price transparency to patients so that consumers are given a clear choice for healthcare services and insurance products. This would in turn increase competition within the healthcare market and could potentially lead to a reduction or downward pressure on medical costs.

“Some of those most impacted by payment reform are within the provider community,” she said. “One of the levers in implementing payment reform is reimbursement. As I mentioned, when CMS starts to move toward value-based payments and considers ways they will reimburse physicians in the future, [cost transparency] will help providers better understand how they are performing against others.”

“Physicians need this information to know what to change and how to effectively perform in the emerging world of payment reform. Payment reform encompasses a lot of different mechanisms, but [cost transparency] is a key measure that will help providers perform better in that world as it continues to evolve,” Gagnon concluded.

Health payers, especially those operating through the health insurance exchanges, will need to consider the importance of plan-to-plan comparisons and enable their consumers base to understand their choices and cost sharing options.

Image Credits: Urban Institute

 

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