Financial burdens in the health exchanges – ctd.

A number of you asked excellent questions in the comments on this post. Alison Galbraith, one of the authors, addresses them in this guest post. Dr. Galbraith is an assistant professor in the Department of Population Medicine at Harvard Medical School and the Harvard Pilgrim Health Care Institute, where she is also associate director of the Center for Child Health Care Studies. Her most recent work has examined health care use and experiences of families in high deductible health plans. She earned a master’s degree in public health from the University of Washington and a medical degree from the University of Rochester. She’s also a friend of mine, but we won’t hold that against her. – Aaron

Great questions/comments that came up in response to this post about our paper on cost problems in the Massachusetts Exchange.

We were also surprised that about a third of those in our study population who enrolled in unsubsidized Commonwealth Choice plans appeared to have incomes under 300% FPL, which would have qualified them for a subsidized Commonwealth Care plan.  Our survey didn’t have the level of detail to say for sure if a person’s income and circumstances would make them eligible for a subsidy.  But if we assume that some of this group was indeed income-eligible for subsidized plans, there might be other reasosn they ended up in unsubsidized plans.

Based on some qualitative interviews we’ve done, it seems that some people consider their Commonwealth Choice plan an interim solution for a temporary lapse in employer-based coverage, or they wanted to continue to use a commercial carrier rather than the Medicaid managed care carriers that participate in the Commonwealth Care program.  About 8% of our respondents with incomes below 300% FPL said they had subsidies for their premiums from their employer.  And, given how complex it is to find and choose a plan, it’s possible that some people didn’t realize they could have been eligible for a subsidized plan.

While the current premium subsidies in the Massachusetts Connector are available only to those under 300% FPL, the premium subsidies under the ACA will be more generous in that those up to 400% FPL will be eligible.  One of the comments talked about how premium subsidies and cost-sharing subsidies have different purposes and outcomes, which is a good point.  The financial burden and unexpected out-of-pocket costs we found for Connector enrollees in our study would be addressed more with cost-sharing subsidies than premium subsidies.  However, premium subsidies could help mitigate out-of-pocket cost problems for Exchange enrollees if they allow people to afford a more generous plan with less cost-sharing.

Aaron is right that Exchanges will need to educate consumers better about available health plan options, and policymakers will need to design the Exchanges to optimize consumer decisions in this complex choice environment. Based on data on experiences choosing plans in the Massachusetts Exchange thus far,  this won’t be easy.  More recent efforts to standardize plan benefits across the metallic tiers in the Massachusetts Exchange might help consumers make apples-to-apples comparisons, and ACA  requirements for Navigators and cost calculators in Exchanges could help people understand the options and find a plan that suites their anticipated needs. We still have much to do to make the ACA Exchanges work.


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