The Disconnect with Consumers and Health Plan Costs

By Clive Riddle, May 11, 2018 eHealth this week released a new eleven page report: Costs and Consequences in the ACA Market: A Survey of Individual and Family Health Insurance Consumers, presenting findings from more than 1,700 consumers who purchased their ACA-compliant plans via eHealth that included:  (1) “Consumers’ idea of a fair price is hard to find in today’s market;” (2) Policyholders aren’t willing to pay extra for key ACA benefits;” and (3) “Voters are bringing health care frustrations to the mid-term elections this fall,” (66% said it was one of their top three issues.) Consistent with a number of previous studies, there is a significant disconnect between consumers sense of where healthcare prices should be in the market, and what they actually are. Health reports that the average individual monthly premium cost during the last open enrollment was $400,  Only 3% surveyed felt $400+ was a fair price. Only 9% felt $300+ was fair. Only 25% felt $200+ was fair. So what is fair? 38% felt premiums should be $100 or less. Another 36% felt $200 or less was fair. The disconnect carries over consumer sense of the value of specific benefits. 61% want mental health benefits, 60% want maternity care and 55% want birth control coverage (which are all ACA required), but only 25%, 24% and 16% respectively, want to pay for them. Even emergency room benefits experience this disconnect: 80% want the benefit and 54% are willing to pay for it. ACA compliant HDHPs are prevalent in the ACA marketplace, and continue to gain the large group environment as well. Benefitfocus this week released a new eleven page survey report: The State of Employee Benefits 2018 - Industry Edition that examined benefit trends for four sectors: education, health care, manufacturing and retail, with an emphasis on examining the impact of HDHPs in each sector. Benefitfocus found that regarding HDHP prevalence by sector: ·         Education: 50% of employers offer HDHPs compared to 23% in 2016. ·         Healthcare: 73%% of employers offer HDHPs compared to 56% in 2016. ·         Manufacturing: 88%% of employers offer HDHPs compared to 54% in 2016. ·         Retail: 76%% of employers offer HDHPs compared to 55% in 2016. ·         All Industries: Healthcare: 70%% of employers offer HDHPs compared to 58% in 2016. When large employers offer other type plans and HDHPs side by side (many employers do not offer both), the HDHP employee enrollment rates by sector were: Education: 34% (30% in 2016); Healthcare: 27% (23% in 2016); Manufacturing: 29% (46% in 2016); Retail: 40% (27% in 2016) and All Industries: 35% (40% in 2016). What would drive such different results by sector? Employee premium HDHP contributions compared to last year decreased 27% in Education, increased 4% in healthcare, increased 46% in manufacturing, increased 20% in retail, and increased 4% overall for all industries. So just as in the individual marketplace, much comes down to price, even though there is a disconnect in the value that price reflects.