High-Deductible Health Plan Consumers Seek Price Transparency

October 31, 2016 - Families and individuals who have purchased healthcare coverage on the ACA health insurance exchanges may have seen that monthly premium rates are expected to rise 25 percent in 2017, but should be aware that those eligible for tax subsidies will still have affordable coverage. Some of the provisions of the Affordable Care Act have led health payers to increase premium costs on the exchanges as well as increase their number of high-deductible health plan offerings.

Payers operating on the health insurance exchanges have been serving older and sicker populations with fewer younger consumers joining the public marketplace. Part of the reasoning behind this may be due to a cap that the Affordable Care Act put on payers to keep premiums for older adults from being no more than three times of the cost for younger populations. With fewer young, healthy adults joining the exchanges, payers have faced financial losses, which led to an increase in premium rates.

More high-deductible health plans have also hit the market. A report from the Kaiser Family Foundation shows that the number of employees with an annual deductible has grown from 70 percent in 2010 to 81 percent in 2015.

With higher out-of-pocket costs from high-deductible health plans hitting consumers, a survey from GfK shows that more consumers on the exchanges are cutting back on seeing their primary care doctors in order to save money.

As many as one out of two or 50 percent of customers on the exchanges have reduced the amount of care they’ve sought to better manage their medical costs. This is significantly higher than those with employer-sponsored insurance or those who have Medicaid or Medicare coverage. Across the general insured public, 33 percent have cut back on doctor visits to reduce their out-of-pocket costs. The results also showed that more women than men went without seeing their doctors (43% of women versus 28% of men).

“Lower-income populations are still the most likely to stick with the ACA exchanges, and should be able to ride out the new premium increases thanks to the subsidies,” Liz Reyer, Vice President of Consulting and health insurance practice lead at GfK, said in a public statement.

“Unfortunately, too many are unaware of these subsidies and may either drop coverage or – if their deductibles and copays rise – forego more doctor visits and possibly medication. To maintain the ideals as well as the cost models behind the ACA, consumer training in self-advocacy and educating consumers about care and coverage options, including subsidies, may be just as important as, say, promoting wellness visits.”

When patients do not seek care in a timely manner, their condition may worsen and these patients are more likely to end up in urgent care or at an emergency room. The costs of emergency care or a hospital admission is usually much higher than seeing a primary care doctor when a health problem first appears.

The results from the GfK survey shows that 27 percent of consumers on the health insurance exchanges with incomes below $25,000 per year have turned to urgent care facilities while the entire ACA customer population had a 12 percent rate of using urgent care. With high-deductible health plans more common on the exchanges, consumers postpone seeing their primary care doctors.

Health payers can work with their consumers to improve price transparency so that fewer postpone physician visits and end up in emergency rooms or urgent care facilities. Currently, the results from the survey show that only 6 percent of consumers on the exchanges have shopped for provider services to find the best price to meet their needs. Additionally, only 5 percent have bargained for a cash discount with their providers.

Private payers can work with their consumers to both reduce their own spending as well as out-of-pocket costs among patients by improving price transparency. Improving member service is key as well as sharing price data from their provider network to help consumers shop for services and reduce their healthcare spending.

“Health plans are at a critical juncture, where they must improve upon their ability to communicate with members to increase satisfaction and remain viable in this era where their members have the ability to ‘shop’ for coverage,” HealthEdge CEO Steve Krupa told HealthPayerIntelligence.com in a prior interview.

Patient satisfaction is expected to increase when price transparency and member services are improved, explained Krupa.

“High customer satisfaction results in increased member loyalty and trust, and our survey shows that health plans have an enormous opportunity to cement themselves as trusted advisors with their members via effective communication,” Krupa said. “Today’s members primarily seek health-related information and advice from providers, friends and family and online websites sites; to-date, health insurers have not earned this trusted status due to such poor communication and a challenging user experience across many channels.”

“If health insurers can provide timely and relevant information on both programs and incentives to participate in on behalf of healthy behaviors, members will enjoy improved health and will consume less healthcare resources,” he concluded.

A survey released from HealthEdge earlier this month shows that consumers are seeking greater price transparency. Out of 2,500 polled consumers, 40 percent said they’ve received a surprise medical bill after their health plans covered part of the service. Half of those with a surprise bill had to spend anywhere from $100 to $500.

To help consumers with high-deductible health plans reduce their out-of-pocket costs, private payers are advised to work with their provider networks to improve price transparency.

Dig Deeper:

How Payers Could Succeed in ACA Health Insurance Exchanges

How the Affordable Care Act Changed the Face of Health Insurance