There will be frequent parallels drawn
to Medicare Part D on this blog because the post-ACA market for
individual health insurance is very similar. Both are clearly drawn
from the same general concept—federal oversight, standards of care,
and (to some extent) underwriting, but executed by third-party
companies who collect premiums and administer benefits. Both have
autumn open-enrollment periods for a calendar-year benefit program.
And smart people will shop both of them aggressively, on an annual
basis.
This autumn is the third year I have
served as a volunteer, helping senior citizens enroll in the best
Medicare Part D program for them. As I've mentioned before, Medicare provides a very easy-to-use tool that tells people taking
maintenance drugs exactly what their best annual value is.
(Unfortunately, there isn't a similar tool for health insurance
shoppers who have a pretty good idea how many primary care,
specialist care, urgent care, ER, scans, surgeries, and labs per year
they're likely to need.)
Because I've been at this for three
years, I've seen people with a variety of drug requirements come
through the office, and I've also helped the same people more than
once. Here a couple of important trends I've observed, and how I
think they'll apply to the post-ACA world.
* The best deals change from year to
year.
Each year I've done Part D enrollment,
there have been one or two plans notable for some extremely
aggressive, competitive moves which set them apart from the rest of
the field. And each year, they are
different plans.
Behind the scenes, the plans are making all sorts of maneuvers with
pharmacies and manufacturers in an attempt to cut costs and lure
customers—and at the same time, trying to figure out how many of
their customers are loyal and locked-in, and will absorb higher
premiums and copays for the convenience of not changing plans. As a
result, people do considerably better when they change plans every
year.
I expect this to be true under ACA as
well. The relationship between many insurers and health care
providers is tighter than it is in the pharmaceutical world (although
there are certainly exceptions, such as CVS/Caremark, which is both
insurer and pharmacy.) Still, I expect there to be a lot of internal
wrangling to minimize costs, particularly for must-cover, zero-copay
services such as basic preventative care, and I expect a lot
of fluctuation as insurers decide which types of customers they want
to attract in the new market.
For example, in my area one provider
has clearly staked out a position catering to those willing to pay
high premiums to minimize per-visit expenditures, with relatively
generous copays and low(-ish) deductibles. Two are making a concerted
play for the healthiest consumers, willing to take on the most
financial risk by accepting very high deductibles in exchange for low
premiums—by ACA standards, anyway. (More about the Dane County
market's interesting segmentation in 2014 in a future post.) This
situation could easily reverse itself in 2015 and beyond, depending
on the financial performance of the plans.
* Some people are leaving money on the
table because they're too inflexible.
Most of the people I see are willing to
change insurers, and a good chunk of them are somewhat flexible when
it comes to changing pharmacies. That's very helpful for them,
because that flexibility can save them hundreds of dollars (or more,
if their drug needs are nasty enough.) That's also not too shocking,
since it's a self-selecting population: these people are making an
effort to come and spend up to an hour with a volunteer who is
helping them find the best plan, rather than just answering an
advertisement once and then blindly renewing every year. So
naturally, they're predisposed to change because they're coming in
with an open mind and an aggressive attitude. (They are apparently in
the minority, according to a Kaiser Foundation study showing that
only about one in eight change plans. My personal experience works with smaller samples, but well over half
of my “customers” benefit from switching every year.)
That said, there are still some who
deliberately leave money on the table because they are not flexible
enough—notably, because they insist on seeing a particular
pharmacist at a clinic pharmacy (rather than a lower-cost retail
chain pharmacy) and/or refuse to use mail order fulfillment. It's
true enough that pharmacists can provide value-added input, advice,
and understanding of one's complex health conditions. But the rising
cost of healthcare in the US is not something that can just be waved
away as the product of greedy (pick your villain: doctors, insurers,
lawyers, some or all of the above.) Patients deliberately making
choices which cost the system more, for highly commoditized products
like generic cholesterol drugs, also play a role.
ACA backers have spoken with great hope
and optimism about “competition.” The slate of essential health benefits established by the ACA does create a somewhat more level and
predictable playing field for such competition, but consumers must
play their part in the competitive market as well. Insurers will have
little incentive to compete if a significant percentage of their
customers demonstrate that they are unwilling to change providers—if
they show that their demand for a given set of doctors is inelastic.
The reality is that this is going to
require people to get very, very mercenary about their insurance
carriers. Some people out there undoubtedly feel that they have
sufficiently complex health conditions that their chosen
specialist(s), and only their chosen specialist(s), can adequately
help them. But for competition to work, the majority of us are going
to have to swallow our pride and acknowledge that our healthcare
needs are not so special that they cannot be adequately handled by
any suitably trained professional, whatever network he or she might
be in during any given calendar year. Electronic records will
hopefully make it easier for a new PCP to pick up where the last one
left off every time we switch carriers. But we're going to have to
cope. If we all insist that only our preferred doctors and hospitals
will do, “competition” will go nowhere.
It's not yet clear how many people will
actually benefit from switching plans on an annual basis—we are,
after all, just inching our way into Year 1 of the full-bore,
ACA-governed marketplace. But Part D teaches that many beneficiaries
do best when they are willing to switch plans and pharmacies on an
annual basis. So, for the good of your fellow citizens and your own
bottom line, get used to showing your bottom to a different doctor
every year.
No comments:
Post a Comment