Federal Exchange

Federal Exchange

Who can use the Federal Exchange?

ANYONE WHO DOES NOT QUALIFY FOR MEDICARE

However, only certain people get a government subsidy:

Do not have employer based health insurance

Making less than 400% of Federal Poverty Line

Reasons for Lower Costsi. Those making between 133-400% of federal poverty level can apply for tax creditsii. Increased competitioniii. Small businesses get more buying poweriv. Administrative costs streamlinedv. Insurance companies cannot discriminate with pre-existing conditions

Federal Exchange Statistics

Narrow Networks

Narrow networks are provider networks sponsored out together by health insurers that supply a limited number of physicians to choose from.

A plan has a “narrow network” if they have a smaller amount of providers available for their members to visit than is preferable or if the amount of covered services offered in the plan is small. (such as failing to provide benefits such as dental etc.)

Narrow Networks are appealing to the insurance companies because they are much cheaper to organize, maintain and sell to customers.

Narrow Networks are growing in popularity.

Narrow Networks

Narrow Networks PPO plans Typically include● Lower Premiums for consumers ● Lower Contracted Rates with Physicians (Insurers contract to keep prices of

services low)● Small numbers of doctors/hospitals/providers for members to choose from● Some small out of network coverage● Smaller selection of specialist physicians

○ For rare specialiaties sometimes only 1 choice

According to a study done by the consulting from Mackenzie and Co. “About 70% of plans are currently sold on the exchanges in 2014 featured a limited network, and their premiums were up to 17% cheaper than plans with broader networks.”

Examples of Narrow Network

A Good Example of a narrow network offered on the exchange is a bronze plan offered by CareSource.

When this plan is compared to a comparable plan offered by Anthem we can see that the amount of providers available to visit is approximately half as many.

In only Indiana a CareSource offered approx. 3000 primary care physicians and Antham offered approx 6000. Care Source Offered 11,000 specialists and Anthem offered over 20,000 specialists.

The Big 5 and their Involvement

United Healthcare Aetna Anthem Humana Cigna

Exiting state exchanges except for DE, NC, and VA

Plans in four states. Planned to venture out in 2017 but decided not to.

CEO Joseph Swedish states that 2017 is a crucial year for its involvement in the marketplace.

Presence in no more than 156 counties in 2017 compared with 1,300 in 2016.

Cigna offered plans in seven states this year and had originally intended to offer plans in 10 in 2017. Instead, the company is scaling back in three states and offering plans in three new states, keeping its total at seven.

Other Insurance Companies

- In Indiana, IU Health is leaving the federal marketplace.

- Smaller insurance companies such as Molina and Centere have found success of the marketplace. They’ve focused on covering low-income customers with Medicaid prevalence.

Future of the Federal Marketplace

The future of the Federal Exchange may look like it is falling apart quickly but according to Ben Wakana a spokesman for Department of Health and Human Services said that within a marketplace,

“There are expected changes and adjustments in the early years with insurers both leaving and exiting states. Experts argue that any good exchange has people entering and leaving the marketplace.”

Customer Satisfaction with policies

The Deloitte Center for Health Solutions Survey (2015)Results:

24% of those surveyed felt they could get affordable care when they needed it16% felt financially prepared to handle future health care costs1 in 3 reported they had difficulty paying for out-of-pocket expenses when enrolled in a

marketplace plan for one yearLess than a third of exchange enrollees reported being happy with their current plans, the

top reason for dissatisfaction being that they paying too much. In comparison, Medicare had a 58% satisfaction rate, and 42% of people with employer plans were satisfied

More than 35% of consumers said they trusted the marketplace exchanges to provide unbiased information

From the first year of open enrollment to the second, about half of people who used the marketplaces switched plans, and about 40 percent of those who did cited cost as their biggest concern

Customer Satisfaction with policiesDeloitte Center for Health Solutions 2016 Survey of US Health Care

ConsumersResults:

Exchange respondents are as likely to say they are satisfied with their coverage as respondents with employer coverage

Many exchange consumers say they had no difficulty paying out-of-pocket (OOP) costs and more feel prepared to handle future health care costs than in 2015

More exchange consumers say they understand their costs than consumers with employer coverage, and when they used their coverage, one quarter of exchange enrollees says they had surprise OOP costs

Out-of-pocket costs, premiums, and network issues are major complaints among exchange consumers who are less than satisfied with their coverage

Premium rates vary widely, but more exchange consumers can recall their monthly premium than other consumers

One-third of exchange consumers that had the same plan for more than one year say they shopped for another plan but found their current one to be the best fit

Problems from Policyholder’s Perspective

Design flaws & software errors (technical problems) with federal healthcare website

In 2013 and 2014 the site caused hour-long wait times for enrollees or potential enrollees

Prevented potential customers from creating accounts & completing 30-step enrollment process

Reports of applications being lost on the siteInsurance providers could not always confirm coverage to policyholder, answer basic

questions, or provide identification numbers needed to fill prescriptions or provide access to medical care

Without proof of insurance, policyholders had to pay out of pocket (mostly people with chronic illnesses, cancer, or were pregnant)

Problems from Policyholder’s Perspective

Healthcare costs too muchConsumers feel they understand their policies, but are afraid they cannot afford

medical servicesLow-to-middle-income consumers who use the marketplace can qualify for tax

subsidies to offset cost of monthly premiums (which average $100 a month) and help them afford care, but copayments, deductibles, and provider costs still present a problem

Some can qualify for cost-sharing subsidies

SourcesMackenzie, Wood. "Case Studies." Consulting - Case Studies | Wood Mackenzie. N.p., n.d. Web. 28 Nov. 2016.

Get 2017 health coverage. Health Insurance Marketplace ... (n.d.). Retrieved November 28, 2016, fr