Behavioral Economics and Employee Benefits – What can we learn and apply?
A Kaiser Health News analysis addresses the expected changes to the 2017 Affordable Care Act, also referred to as Obamacare. The analysis perfectly captures the essence of concerned healthcare consumers, “Most consumers care about two things: The cost of the plan and whether their doctor or hospital is in the plan’s network.”
Taking our lead from this insight into the concerns of healthcare consumers, we take a look at specific Obamacare changes that affect cost and the plan’s network.
The Department of Health and Human Services finalized the first three changes. The fourth change represents anticipated increases in premiums for specific plans in a narrow segment of the population.
Anticipated Obamacare Changes for This November’s Enrollment
1) More information about the size of the insurers’ network of doctors and hospitals may be accessible.
- Insurers are required to provide 30-day notices to consumers before a network provider is removed.
- The provider must continue to provide coverage to active patients (e.g. later stages of pregnancy) for up to 90 days.
- Basic, standard, or broad (or synonymous verbiage) is the designation each plan’s network receives.
2) Consumers may be provided more warning about unanticipated out-of-network medical bills.
Out-of-network providers’ bills often surprise people. These bills occur even in in-network facilities because some doctors and staff in those facilities are out of network.
- New rules make payments to these out-of-network doctors and other medical staff count toward their annual out-of-pocket maximum.
- Unfortunately, the rule only applies when the insurer hasn’t warned patients at least 48 hours before a procedure that they might receive care and bills from providers who are out of network.
3) More standardized out-of-pocket costs
- Rules to standardize out-of-pocket costs make comparison shopping easier.
- The rule also helps keep consumers from paying hundreds or thousands of dollars in deductibles before some commonplace services are covered.
- Regulators developed six plans that present specific dollar copayments for primary care, urgent care, mental health, substance abuse treatment, and many prescription drugs without consumers to first spend money to reach annual deductibles.
- Standard copayments will likely be higher for some consumers. For instance, the standard bronze has a $45 copayment for a primary care visit and $35 for a generic drug prescription.
- Smaller copayments—$30 for a primary care visit, $65 for a specialist visit, $15 for generic drugs, and $50 for brand name—are set for the standardized silver plans.
4) 2017 Premium Increases
A study by the Kaiser Family Foundation analyzed the changes in insurer participation as well as premiums. The premium analysis was done specifically with the lowest-cost and second-lowest silver marketplace plans for several reasons:
- The premium rate data for these plans are complete and publicly available for the District of Columbia and cities in 16 states.
- This complete data set allows for premium calculations for an individual without a tax credit might pay.
- Individuals choose these plans most frequently.
- The second lowest-cost silver marketplace plan is the benchmark used to calculate government premium subsidies.
According to this analysis of the 17 population centers:
- Costs are increasing faster in 2017 than in earlier years for the aforementioned silver plans.
- The second-lowest silver plan in these cities will increase cost by an average of nine percent.
- In the states of each of the cities analyzed, seven will see insurer participation remain the same or increase, whereas the 10 other states will see a decrease.
image credit Kaiser Family Foundation Study
image credit Kaiser Family Foundation Study
There are two very important notes to consider. First, premium changes do not include what enrollees receiving premium tax credits will pay. Second, the state or federal government can change these preliminary plans.
Obamacare Changes Aimed at Making It Easier for Consumers
The first three Obamacare changes aim to help inform the consumer when making choices about potential plans. The last change is to help maintain the quality of health insurance offerings amidst a rapidly evolving industry.
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