Why Payers Should Include Consumer Engagement in Health Plans

June 28, 2016 - In order to ensure that the health insurance exchange successfully reduces healthcare spending, it may be necessary to strengthen consumer engagement and education so that policyholders continually purchase the right health coverage for their pockets.

The Episcopal Health Foundation (EHF) and Rice University’s Baker Institute for Public Policy published a study earlier this year showing that Texans who have obtained health coverage through the health insurance exchange have less knowledge of certain jargon than individuals who have employer-sponsored coverage or health insurance through Medicare and/or Medicaid.

Since as many as 1.3 million Texans purchased a health plan through the health insurance exchange, it is important to improve consumer engagement and education in order to reduce costs through this federal marketplace. Those who purchased coverage through the health insurance exchange were found to be less likely to understand terms like co-payments, deductibles, and premiums.

Additionally, these individuals were less likely to grasp how to best utilize their medical insurance. More than half - 51 percent - stated not knowing the costs of seeing a healthcare professional outside of their provider network. Many also didn’t know what services count as preventive care, which are now part of a health plan’s coverage with no out-of-pocket expenses due to the Affordable Care Act.

One out of three of these consumers did not know what the term deductible meant while nearly half - 48.4 percent - did not understand the term coinsurance. This means that educating consumers on the terminology and jargon of health insurance is vital to keeping costs low and healthcare spending from rising rapidly.

Consumer engagement remains a key goal of the health insurance industry. Memorial Hermann Health Solutions is one medical organization that has moved forward with revolutionizing consumer engagement by creating their own health coverage marketplace separate from the federal health insurance exchange.

Memorial Hermann Health Solutions has created its own platform through which it sells health plans and looks to further boost consumer engagement, which had enrolled more than 8,000 members as of April 2016. In an interview with HealthPayerIntelligence.com, Neil Kennish, Associate Vice President of Marketing and Sales at Memorial Hermann Health Solutions, discussed how this new platform has further engaged customers and brought more patient satisfaction to the table.

“We tried to do a lot of things to change the way we approached consumer engagement for 2016. Historically, our health plan had been geared towards brokers as well as employers. Then the changes that accompanied the Affordable Care Act really put an emphasis more on the individuals and targeting consumers,” said Kennish.

“We tried to take an approach where we either did focus groups or did surveys of our existing customers to get a better sense of what critical benefits that they need to make sure are covered without them having to be concerned,” Kennish explained. “What are benefits that need to be explained in detail so that people understand the difference between copays and coinsurance rates? We try to take away some of the questions and uncertainty around health insurance so that it is an easier decision for them.”

Consumer engagement remains an important avenue for health payers to target in the new landscape of healthcare reform. The Patient Protection and Affordable Care Act has brought much more focus toward benefiting the consumer especially with regard to preventive care and greater access to medical services.

The Affordable Care Act has brought the individual mandate, which requires Americans to have health insurance or else risk a tax penalty. This mandate along with Medicaid expansion has widened the opportunities people have with regard to accessing medical care.

Paul Ketchel, the Founder and CEO of MDsave, spoke with HealthPayerIntelligence.com about the future of the Affordable Care Act and its goal to ensure that as many Americans as possible have healthcare coverage.

“What we will see from the Affordable Care Act is what’s already playing out right now. We’re going to have to see the mandated coverage requirements of the plans change in order to make these exchanges, options, and other coverage more affordable so that carriers can continue to provide that. I think the mandated coverage requirements are going to soften and go away in order to make sure we don’t lose carriers,” Ketchel said.

“I think also, we’re going to see a trend where you’re going to have more options come on the market because we’re going to have to move back to having more individual plan designs versus mandated coverage designs in order to give lower premium options. For the consumer, what you’re seeing right now is that they’re paying more out of pocket for these high deductibles and out-of-pocket costs. I think that’s going to continue, but we can lower those costs by offering greater plan design options and being able to lower premiums,” he clarified.

Ongoing changes in the health insurance market are also making an impact on consumers. For instance, health insurance mergers bringing the top five payers down to only three may hurt consumer interests, said Ketchel.

“I think that the mergers are really coming out of all the changes that are taking place,” Ketchel explained. “Because the risk pool has changed and the mandated coverage requirements have hit the industry, the insurance business is a much more difficult business to be profitable than it was before. So really, you’re seeing these merger-driven consolidations to try to bring the economy to scale and manage cost better.”

“I think that for the consumer, you will have possibly less choice and you’re going to see some higher cost. However, I think these mergers are going to keep plans and networks in place whereas without these mergers, we may have lost those networks,” concluded Ketchel.

The health insurance industry will need to continue pursuing consumer engagement and education in order to reduce costs of care and ensure healthier populations, which would also make an impact on cutting healthcare spending. Along with bringing payment toward value-based care models, payers will need to work with consumers to better educate and bring low-cost health plan options that would reduce the financial impact on all parties involved.

Dig Deeper:

Patient Engagement Cuts Healthcare Spending among Payers

HHS Pursues Higher Enrollment on Health Insurance Exchanges