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Analysis

More Health Plan Competition Breeds Higher Satisfaction Scores

By Rene Letourneau  
   April 20, 2016

Competition among health plans forces them to fight for market share, which is good for members, says Greg Hoeg, vice president of U.S. insurance operations at J.D. Power.

Bad news for residents of 34 states where UnitedHealth Group is exiting the PPACA exchanges: Health plan member satisfaction is highest in areas of the country where there is more competition among carriers. 

That's the main takeaway from the recent J.D. Power 2016 Member Health Plan Study. Nationally, member satisfaction with their health plans improved nine index points in the 2016 study, scoring a total of 688 on a 1,000-point scale. This uptick comes on the heels of a 10-point improvement in 2015. 

Payers Improve Service to Gain Market Share

The increase in satisfaction that is demonstrated in the 2016 study is driven by improved performance across all factors, including in coverage and benefits (+12 points); information and communication (+11); and customer service (+10).

On a regional basis, the study finds that members indicate more satisfaction with cost (610 vs. 606), communication and information (646 vs. 641), and customer service (743 vs. 740) in competitive markets as compared to those dominated by a single carrier.

Competition among health plans forces them to fight for market share, which is good for members, says Greg Hoeg, vice president of U.S. insurance operations at J.D. Power.

"Where there is competition, there tends to be more customer satisfaction. What it comes down to is a greater awareness on the part of health insurers in general that they have to monitor customer satisfaction and be more responsive to it," Hoeg says. 

"Some are turning to better communication with the explanation of benefits and notification of services, whether through traditional or electronic means. A large portion of carriers are also trying to make clear during the open enrollment period exactly what their plans offer because confusion on the part of consumers can lead to loss of satisfaction."

Satisfaction Improves After Taking a Dive

J.D. Power has conducted the study since 2007 to track member satisfaction among members of 135 health plans in 18 regions throughout the country. The study focuses on six key factors:

  • Coverage and benefits
  • Provider choice
  • Information and communication
  • Claims processing
  • Cost
  • Customer service 

Member satisfaction dipped to its lowest point in 2014, due mainly to the implementation of the Patient Protection and Affordable Care Act and the introduction of the health insurance exchanges, Hoeg says. 

"Since the passage of Obamacare, there was a bit of a drop off in customer satisfaction overall. Part of that was caused by trepidation because of the unknowns of some of the changes being caused by Obamacare," he says. 

"Now people are getting more familiar with how things are working, and it's working more smoothly on the payer system. These things are bringing about greater satisfaction overall again."

Carriers in competitive markets have also upped their game when it comes to communicating the details of their health plans, Hoeg says, which is also helping to increase satisfaction. 

"Where there is more competition, carriers have recognized that they can't just be focused on the cost side of the business. It has changed their focus to be more oriented on customer satisfaction as a pivot point," he says. 

"People have trepidation because of the complexity of the offerings. I think many carriers are realizing this and are trying to adjust by simplifying their documentation."

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Rene Letourneau is a contributing writer at HealthLeaders Media.


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