Your prescription for health insurance exchanges
Almost three out of four people who buy their own medical coverage say they'll turn to health insurance exchanges when they become available in 2014, according to a recent study by J.D. Power and Associates.
The study, based on a survey of more than 33,000 members of 136 commercial health plans across the country, shows that 73 percent of consumers who don't get coverage through an employer "definitely will" or "probably will" use exchanges to secure medical protection. Motivations range from finding the best deal to dissatisfaction with their current health coverage, says Rick Millard, senior director of the healthcare practice at J.D. Power. (See: "5 ways your boss is downsizing your health insurance.")
"As healthcare costs continue to increase and members pay a higher percentage of the premium, health plan members are increasingly aware of exactly what they are getting for their premium," Millard says in a statement. "If a member has experienced problems and perceives the possibility of having more control over costs through exchanges, this new purchasing method may become more appealing."
Mandated by the Patient Protection and Affordable Care Act (ACA) and taking effect in 2014, an exchange is an online marketplace where individuals and small businesses can shop for health plans. Ideally, exchanges would make it easier for people to purchase coverage and could lead to lower prices due to increased competition among providers. States are expected to run their own exchanges or partner with the federal government to organize and implement them. (See: "Health reform sticks: Now what?")
"By pooling people together, reducing transaction costs, and increasing transparency, exchanges create more efficient and competitive markets," according to HealthCare.gov, the official ACA website.
The annual J.D. Power study asked consumers if they were satisfied with their health plans in several areas, including benefits, deductibles, claims processing, customer service and care approval decisions, among others. Beyond the 73 percent who said they would consider exchanges to find better or cheaper coverage, the study found:
- Sixty percent of those interested in exchanges said they had to "contact their health plan regarding a problem" during the past year. This compares to the 45 percent who are interested but didn't report a problem with providers.
- A higher percentage (59 percent) of members in high-deductible plans say they're may use exchanges. That compares to the 45 percent in low-deductible plans.
- Interest in exchanges is highest among health plan members in small companies (53 percent), followed by those in medium (48 percent) and large (43 percent) firms.
- Forty-eight percent of all members, including those in either individual or group plans, showed interest in using exchanges.
- Fifty-one percent of all members say their premium costs have climbed during the past year.
Health plans ranked the best by respondents included Kaiser Foundation Health Plan, Health Partners, PacificSource Health Plans, Select Health, UnitedHealthcare, AvMed Health Plans, Health Alliance Plan (HAP) and Blue Cross and Blue Shield operating in Alabama, Illinois, Kansas City and Texas, among others.
Plan to use a health insurance exchange? Be prepared
HealthCare.gov has a consumer checklist for your reference.
Beyond these suggestions, J.D. Power also offers a few tips:
- Consider the cost-to-benefit ratio when shopping for a plan. "Generally speaking, the higher the cost, the higher the number of plan features and healthcare provider flexibility," says J.D. Power. "Conversely, while lower-cost plans may provide lower premiums, they may also provide fewer choices of plan features or healthcare providers."
- Research exchanges to learn how they work and, specifically, what is offered in your state. "You may qualify for state exchanges if your income is within a certain range or if you work for a small company, which may mean the possibility of more choices of coverage at a lower cost," J.D. Power points out.
- Spend as much time as needed to understand your coverage. Health plans can be confusing, especially when you look at detailed rules for deductibles, co-payments and other expenses. "If you don't have a clear understanding of the coverage and you have a choice of plans, opt for the simpler approach," suggests J.D. Power. "For example, you may be more satisfied with fewer choices of healthcare providers in order to have coverage with less complicated costs."
Des Toups is a writer, editor and expert on insurance, cars and personal finance. He has written extensively about all three for national publications such as MSN and major newspapers such as the Seattle Times. He has been quoted about insurance issues in The New York Times, USA Today and Kiplinger's. Follow him on Twitter @destoups.