Standardized health insurance plans, also known as "simple choice" plans, can benefit consumers and have little or no impact on premiums, a Families USA report says.
High insurance deductibles and out-of-pocket expenses can be infuriating to consumers. Even worse, some will avoid seeking medical attention because they feel they can't afford it.
The magic number where an insurer will actually pay for something is frustratingly out of reach for many.
But a new kind of health plan aims to knock down that cost barrier and encourage access to primary care services. The new type of plan promises to achieve these goals without affecting the insurer's bottom line.
A report from Families USA supports the claim.
The standardized health insurance plans, also known as "simple choice" plans, were designed by the federal government for the healthcare marketplace. They were included in CMS's final rule on Benefit and Payment Parameters for 2017.
Simple Choice plans can benefit consumers with little or no impact on premiums, according to the Families USA report. The Washington, DC-based nonprofit and nonpartisan group advocates for high-quality, affordable healthcare.
The report debunks the idea that insurers are already offering the best possible coverage that they can without going broke, says Senior Policy Analyst Lydia Mitts, author of the report.
Competitive Premiums
"The findings of this report show that insurers can design plans in smarter ways and more patient-centered ways, so that they provide immediate help. People will be able to go to the doctor and fill a prescription without worrying about paying out of pocket," Mitts says.
"They can do that and still have competitive premiums to other silver plans in the marketplace."
Related: Silver Plan Premiums to Increase 10% in 2017
Standardized plans are plan offerings designed by the governing body of a marketplace that insurers are encouraged, but not required to sell. The federal standardized silver plan has a patient-centered design that covers numerous outpatient services before the deductible kicks in, making it easier for consumers to access that care.
Families USA contracted with the independent actuarial consulting firm Milliman to compare the federal standardized silver plans for the 2017 exchanges to existing non-standardized silver plans in North Carolina, Pennsylvania, and Virginia. All three of the silver plans that were studied cover at least some of the office visits and drugs only after the deductible.
The analysis showed that it is possible to design plans that cover basic outpatient care before the deductible and that still have competitive premiums.
After considering all benefit differences, the average premiums for the federal standardized silver plans would be within plus or minus 5% of the three non-standardized silver plans that were the focus of the study. The simulation used for the study held utilization constant to examine direct changes in costs.
So if more accessible coverage can be provided to consumers without significantly raising premiums, why aren't more insurers doing that?
"There are some good actors in marketplaces and there are some regions of the country where insurers are actually staking steps to develop plans that are more patient-centered," Mitts says.
"But we see a patchwork of some insurers doing it; it's something that all insurers in a region are doing, or none of them are doing it. This standardized plan creates an opportunity to expand this type of plan option across all federally facilitated marketplaces, so your address doesn't dictate whether you have access to this type of plan."
Gregory A. Freeman is a contributing writer for HealthLeaders.