By STEVEN FINDLAY

It’s open enrollment season—the annual period in which tens of millions of consumers wallow in the misery of health insurance choices and costs.  So, let’s pause to reflect on the status of things—enrollment-wise—with employer coverage, Medicare, and the exchanges. 

In particular, do consumers have better tools these days to help them choose insurance plans? 

For people with employer-based coverage—about 150 million Americans—things are okay and stable, but not great. The latest report from the Kaiser Family Foundation, released last month and based on a detailed survey of 1,900 employers (small, mid-size and large), indicates that premiums rose on average a modest 3% in 2016—to just over $18,000 for family coverage.  Workers paid 29% of that. 

A similarly small increase in premiums has prevailed for several years and is expected again for 2017. 

Almost all firms with 50 or more employees offer health benefits and the vast majority claim their coverage meets the ACA’s requirements for value and affordability.  Overall, 56% of employers offer health benefits because hundreds of thousands of small firms either choose not to offer it or can’t afford it—especially the smallest Mom and Pop shops.

Notably, despite the dire predictions by ACA opponents, the survey found no evidence that businesses are reducing workers’ hours to avoid the law’s requirements to offer coverage (or pay a penalty).  Indeed, more employers with 50 plus workers say they have shifted or plan to shift workers’ hours from part-time to full-time to make them eligible for health benefits.  That’s a relief and a very positive trend.   

The bad news:  employers continue to shift out-of-pocket (OOP) costs to consumers. That’s how they’re keeping larger premium hikes at bay.  Higher deductibles, co-pays and co-insurance have been the name of the game for almost a decade.  The average deductible is almost $1,500 and in small firms it slid above $2,000 this year.  And 30% of workers are now in defined high-deductible plans—that is, ones with health savings or reimbursement accounts.  That’s up from just 4% of workers a decade ago and 20% 3 years ago, in 2013. 

Some analysts think the OOP cost shift in employer plans can’t continue much longer. I’m not so sure.  A lot of small and mid-size employers (and the brokers and benefits firms that help them) are probably looking at what’s happening in the exchanges—where deductibles are trending much higher, $3,000 and up— and thinking there’s more upside. 

The choice of employer-sponsored plans has also shrunk.  While the KFF survey didn’t measure this, or at least it wasn’t reported, other recent surveys have found that workers in employer-sponsored plans have fewer plans to choose from, or switch into, than even just a few years ago.  That means less competition and less shopping and comparing plans at the consumer level.  (The exception is companies that have shifted to privately created exchanges; there, workers likely have more choice than before.  Indeed, it’s one reason some companies are making that switch.)  

Health Plan Ratings

For those workers who do have a choice, and for employers, I think it’s still worthwhile to check out the state-by-state health plan ratings from the National Committee for Quality Insurance.  NCQA’s 2016-17 version of the ratings was released last month.  (NCQA.org)

NCQA has rated plans for over a decade and the methodology has improved over time.  I can attest to that personally, having served on NCQA’s Standards Advisory Board from 2009 to 2012.  By way of disclosure, I also translated NCQA’s ratings for consumer consumption while working at Consumer Reports, in what was an exclusive arrangement between NCQA and the magazine.  As of this year, WebMD serves as the media outlet for the ratings, of some 1,000 plans (503 private/commercial; 338 Medicare, and 171 Medicaid).   

NCQA launched the ratings to address a serious issue that has, per the above points, gotten worse.  People often don’t choose the plan that suits their needs or finances.  A recent National Bureau of Economic Research study, for example, found that 63% of some 50,000 employees at one Fortune 100 company selected a health plan that was not the most cost effective option.

That example is courtesy of Consumer Reports, Nov 2016 issue, page 21.  The article goes on to note that 9 in 10 workers stick with the same plan year after year—most through the least-resistance path of automatic renewal.  The magazine’s advice, with which I concur, is that employers should review all the offerings each year, with special attention to benefit changes, deductibles and co-pays, provider network changes, and drug formularies.   

NCQA’s ratings can’t help people discern their company’s unique benefits and plan options. Rather, the ratings probe almost all the major national, regional and state health plan’s record across dozens of batch of clinical quality, outcome and patient satisfaction measures.

Unfortunately, I don’t think the partnership with WebMD is off to a good start. The ratings are not prominently mentioned on WebMD’s home page and it takes too long to find them amid that site’s plethora of information and features.  When you do find them, the tool works well.  But WebMD appears not to have written a feature story that explains the ratings or puts them in context.  They are simply presented as a search tool.  WebMD links back to NCQA’s site for an explanation of the methodology. 

Notably, as of 2015, NCQA shifted to a 5-star composite rating system, in line with CMS’s move in that direction over the past 2 years.  This is mostly a good thing, but has a downside.  Namely, the composite score drowns out the details and offers less meaningful discrimination among plans for the casual consumer (or employer) user.  For example, of the 1,012 plans rated in 2016, only 105 (10%) received a top rating of 4.5 or 5 and only 27 (3%) scored 1.5 to 2.0.  The vast majority of plans are in the muddy middle. 

Not all that helpful.  Of course, you can drill down into a wealth of details on NCQA’s site, and employers should absolutely do that.  NCQA’s release on the ratings can be found here.  

Medicare

Medicare’s open enrollment is October 15 to December 7.  Medicare now covers about 56 million people; 17 million (30%) of them are in Medicare Advantage (MA) plans.  That percentage is expected to continue to grow. 

Almost all (70%) of Medicare beneficiaries are now enrolled in a Part D plan or have prescription drug coverage through an MA plan.  And Part D has been covering a growing share of drugs costs in gradual steps every year, mandated by a provision in the ACA.    

The bad news:  Original (FFS) Medicare goes into its 51^st year with a benefit that continues to expose enrollees to excessive OOP costs.  So you could almost say that employer and exchange plans are trending toward Medicare.  Not a good thing! 

A new Commonwealth Fund analysis, based on Census surveys, finds that nearly a quarter of Medicare beneficiaries (11.5 million) were underinsured in 2013-14. Combining premiums and OOP medical expenses, 16% of beneficiaries spend 20% or more of their income on health care, the analysis found.  In some states, the proportion of beneficiaries spending that much OOP ranged up to 32%.  (There’s an emerging consensus that no family, of any age, should have to spend more than 10% out of pocket on healthcare.) 

In that context, remember—and it always a shocking statistic to me—that half of Medicare beneficiaries (which includes 9 million disabled people under age 65) live on less than $25,000 a year. 

With long-term care costs rising and the population aging, the next president and Congress simply must begin the tough debate on modernizing Medicare’s benefit.  But that’s not my subject in this blog. 

In contrast to employer-based coverage, most Medicare beneficiaries have a wide choice of MA and Part D plans.  In some areas, the choice is too wide, with 15 or 20 or more Part D plans competing, for example.  When Part D launched in 2006, the shear number of plans quickly became an issue, with millions of beneficiaries confused about how to compare plans and choose.  Things are somewhat better today. CMS rates both MA and Part D plans, and NCQA rates MA plans.  (I don’t recommend paying attention to any other ratings.) 

No Medicare beneficiary, in my view, should choose an MA or Part D plan without consulting those ratings.  CMS’s Part D site lets you enter the drugs you take, and even enter your Medicare number to do a personalized search.  (When I tried this, however, it didn’t work.)  Medigap plan ratings are also available.

Unfortunately, just as with employer plans, and despite the government’s exhortations to beneficiaries to shop and compare MA and Part D plans, way too few enrollees do it.  In 2015, only 1 in 9 Part D enrollees switched plans.  CMS and others have calculated that millions more people could save money by switching. 

Of course, it’s understandable inertia given the pain-in-the-neckness of the task.  Medicare needs to do more to make comparisons easier and to urge people to do it.     

Exchange plans

Open enrollment for the exchanges is November 1 to December 15 for people who want their coverage to start by January 1.

Obviously, it’s going to be a challenging open enrollment for the exchanges.  About 10 million people are enrolled now, with too few young people.  The feds are desperate to bring more young, healthy people into the fold.  But as has been widely reported, premiums are rising substantially in some areas.  The administration is on the defensive, and the environment is probably not great for achieving their goal of getting several million more people enrolled.

On consumer choice in the exchanges, the situation is still evolving.  The ACA mandates that exchanges help individuals and small employers “shop for, select, and enroll in” health plans. Participating plans already have to be vetted and qualify.  But, to date, exchange customers have not had plan comparisons to help them choose. 

It’s coming.  On September 30, CMS’s Center for Consumer Information and Insurance Oversight and its’ Center for Clinical Standards and Quality issued an update on plan ratings. Not surprisingly, HHS intends a phased approach to public reporting of health plan-specific quality information.  

Bottom line: initial plan ratings based on quality metrics have been kicked down the road for one year.  So, in the fall of 2017, consumers will have some comparative information on which to base their choice of plans.  In the meantime, Virginia and Wisconsin have been selected as pilot states.  Both will make available comparative information during this year’s open enrollment.  CMS will then study the impact on consumer behavior.

Because employer-based plans and exchange plans exist in quite different universes, the NCQA ratings of employer plans cannot be used to choose an exchange plan.  Nevertheless, NCQA offers consumers some useful advice, which included checking out the accreditation status of a plan, NCQA’s report card results with special attention to consumer survey results.   

The presumption is NCQA’s ratings will serve as either the actual basis for the coming exchange plan comparisons in 2018 and beyond, or serve as a template for those ratings.

Lastly, CMS and HHS let it be known last week that the government will choose health plans for the hundreds of thousands of people whose insurers have dropped out of the exchanges for 2017.  As reported in The New York Times on October 9, the administration would strongly prefer people make their own choice, and expects most to do so. 

This was the right move by the feds, but expect to read some stories in the months ahead of people with severe sticker shock who failed to make the switch themselves and got put in a plan that cost substantially more than their current one. 

Steven Findlay is an independent healthcare journalist, policy analyst, researcher and consumer advocate.