Non-Profit Health Plans Want Tax-Status Disclosure on HIX

Research has shown that consumers "do think there is a difference," between for-profit and not-for-profit health plans, says the head of an industry group. But in the final rule on health insurance exchanges, CMS has declined to require that tax-status be disclosed.

Nonprofit health insurance plans continue to dominate customer satisfaction and quality lists, and they want consumers to know about it.

Bruce McPherson, president and CEO of the Alliance for Advancing Nonprofit Health Care, says federal and state health insurance exchanges should do more to make the tax status of health plans readily available to consumers.

"The research has shown that consumers do think there is a difference and it is important," McPherson says. "Right now both in the federal exchange and the state exchanges under the federal rules for every plan that is offered they have to provide consumers with a summary of benefits and coverage form. All of the key information is there for the consumer in a user-friendly format. The one item that we had urged (the Centers for Medicare & Medicaid Services) to include would indicate if it's a non-profit or a for-profit health plan."

In the end, CMS declined to include that tax-status in the final rule.

"They provided no explanation. They didn't comment on our request. I could not get a straight answer out of them," McPherson says. "I am going to try to get all of the nonprofit health plans together, as many as I can, to make a big push in Washington to get this changed.

McPherson says a Zogby telephone survey from 2010 found that two-thirds of respondents didn't know if their health coverage was provided by a for-profit or a nonprofit plan, even though 75% of the respondents said they felt the distinction was important.  

The push for greater transparency comes as for the tenth straight year nonprofit plans dominate the National Committee for Quality Assurance annual rankings of health plans. Of the more than 1,400 plans ranked by NCQA, McPherson noted that:

• 100% of the Top 20 ranked private plans are nonprofit
• 95% of the Top 20 ranked Medicare plans are nonprofit
• 70% of the Top 20 Medicaid plans are nonprofit

In addition, McPherson says nonprofit plans have for the past eight years dominated the J.D. Power and Associates annual surveys for consumer satisfaction in rankings that combine for-profit and nonprofit plans.

NCQA Releases Annual Health Plan Rankings

"I guess it's just a part of sticking to the mission, which is all about quality and customer service and cost and access," McPherson says. "It comes down to trust more than anything. This may be true of other nonprofit healthcare providers as well; trusting that folks are going to be more concerned with doing the right thing than having profits as their primary goal."

"Making the information more accessible to the public means that more consumers could take advantage of that information and more of them would gravitate to the non-profit plans rather than the for-profits. And why not, since all this data shows that quality and customer satisfaction is typically better."