As we approach 2014, Obamacare’s opponents have launched yet another hot-air balloon: a rumor that insurers will shun the health insurance marketplaces. There won’t be enough insurance offerings, the critics claim, to create competition in the marketplaces where small business owners and individuals will be shopping for coverage. As a result, they say, prices will be higher than expected.
California already has proven them wrong. Two days ago, the state unveiled the offerings that will be available in its exchanges – along with the prices. Nearly three dozen plans had submitted bids, and 13 were selected.
In every region in the state, individuals will be able to purchase comprehensive insurance that offers free preventive care, covers the 10 essential benefits, and caps out-of-pocket spending for less than $4,000 a year. The Congressional Budget Office had estimated that such comprehensive coverage would cost $5,200.
The offerings “strike me as very competitive,” said Caroline Pearson, a vice president at Avalere Health, a consulting firm in Washington,
Typically, the critics ignore that what matters most is not the number of plans available in the exchanges, but how good they are. Quality, not quantity is what counts.
“Robust competition” does not depend on the free-market chaos of 20 or 25 plans vying for market share. It turns on a few good companies offering transparent information. Then, and only then, can consumers compare them and make rational decisions.
Non-profit insurers will join the exchanges
Insurance industry whistle-blower Wendell Potter recently rebutted the notion that a shortage of options would stifle exchange competition here, on healthinsurance.org.
As Potter pointed out “most if not all . . . nonprofit insurers almost certainly will want to offer their policies on the exchanges because a significant percentage of their current customers are small businesses and individuals . . . who cannot get coverage from an employer.”
By contrast, most of the big for-profits – “Aetna, Cigna, Humana and United HealthCare – are far more interested in administering benefits for large companies than selling directly to individuals and small businesses.”
The national brand names lack “experience and expertise in the individual and small group market” Potter observed. For that reason, they are afraid that they cannot compete – on quality or on price. This explains why UnitedHealth Care, Aetna and Cigna are not going to try go head to head with Kaiser in the California Exchange.
Aetna CEO Mark Bertolini has said that Aetna will operate in only 14 exchanges and is aiming for a “measured approach … we just think that we have to see how these things operate and we’re not going to go in for a land grab.”
Meanwhile Group Health Cooperative, a non-profit in South Central Wisconsin is “going to go all in,” says marketing director Al Wearing. For consumers, this is very good news.
When quality and customer satisfaction are measured, non-profits top the charts
Since 2010, Consumer Reports has been publishing health plan ratings from the National Committee for Quality Assurance (NCQA). The results are eye-opening: When it comes to both quality of care and consumer satisfaction, non-profit insurers beat the for-profit brand names all to a hollow.
The scores are based on:
- Consumer satisfaction (as measured by two surveys);
- Prevention (For example, prenatal and postpartum care, cancer screenings, and appropriate use of asthma medication.);
- Treatment (When assessing diabetes treatment, NCQA looks at blood-pressure control, retinal eye exams, glucose testing and control, LDL cholesterol screening and control, and monitoring of kidney disease.);
- NCQA accreditation (The accreditation process involves evaluation by physicians and managed care experts who make sure plans provide accurate marketing material, and give clear information to members on coverage and denial decisions Accredited plans also commit to being held accountable for their performance by reporting data.)
In 2012, every one of the top 10 private plans in the report was a nonprofit. For the third straight year, the No. 1 private plan in the nation was Harvard Pilgrim Health Care’s HMO.
Wisconsin’s Group Health Cooperative, mentioned above, was among the top ten. Ninety-five percent of its enrollees are “happy with how doctors communicate.” Can you say that about physicians in your insurers’ network?
In the ratings, brand-name carriers tank
What is shocking is how badly the brand-name for-profits did in the rankings. Aetna, Humana, and UnitedHealthCare all have more private plans in the bottom 100 than in the top 100. This was true, not just in 2012, but in 2011.
To see how plans in your state fared, check out the ratings. (For access to the rankings, you’ll need to sign up for a one-month subscription to Consumer Reports.)
Harvard Pilgrim expands its New England franchise
Top-rated Harvard Pilgrim now has nearly 1.2 million members in Massachusetts, New Hampshire and Maine, and is making plans to march into Connecticut, a state dominated by for-profit insurance giants.
There, the leading commercial player – Anthem Blue Cross Blue Shield, owned by WellPoint, a for-profit – has been losing market share.
“With the exchanges coming, Connecticut is the perfect place for Harvard Pilgrim to follow up on what they’re doing in New Hampshire and Maine,” says Ric Gross, an analyst at HealthLeaders-InterStudy.
‘Integrated’ health systems – the future
Five of the NCQA”s top ten are integrated health systems in Florida (Capital Health Plan), Wisconsin (Group Health), Colorado (Kaiser) and California (two Kaiser plans).
In addition to providing insurance, these “integrated systems” employ the doctors who provide care.
“Unlike traditional independent fee for service’ doctors and hospitals that make money by doing as many treatments and procedures as possible, whether needed or not, integrated plans prosper by keeping their customers healthy and avoiding wasteful care,” Consumer Reports explains.
Other highly-rated integrated plans like Geisinger (Pennsylvania), Group Health Cooperative (Seattle, Washington) and HealthPartners (Minnesota) are among our most efficient because the provider and the payer share the same goal.
Kaiser is the largest, and will likely serve as a model for Accountable Care Organizations of the future. Fully 75 percent of the Kaiser plans place in the top 25 percent on NCQA’s charts, and Kaiser plans to join the exchanges in all of the states where it operates: California, Hawaii, Oregon, Colorado, Georgia, Ohio, Maryland, Virginia, and Washington DC.
Last year, Kaiser jacked up its direct-to-consumer outreach and by year-end membership had jumped 131,000, expanding Kaiser’s base to more than 9 million. Now, as it joins the exchanges, Kaiser is positioned to help the government get the word out: Buy insurance in an exchanges and you may well receive a tax credit to help cover premiums.
Price
Are non-profits cheaper? Not necessarily. But the top plans offer better value for your dollars.
For-profit insurers must worry about meeting Wall Street’s demands for fat profits margins – and rising earnings – quarter after quarter. This makes it difficult to set long-term goals. If a company misses investors’ quarterly expectations, its share prices will plummet.
The best non-profits, on the other hand, can focus on long-term strategies to improve their customers’ health by stressing preventive care, and chronic disease management. Over time this will lower the insurers’ costs (under reform, this will lead to lower premiums) – and cement customer loyalty.