Reflecting on Health Reform—The Marketplace Experience: Month One
A month after the launch of the Affordable Care Act’s health insurance marketplaces, debate still rages about their ability to provide access to affordable, comprehensive insurance coverage. Many states that are running their own marketplaces have posted data on the numbers of applicants and enrollees, but lack of information about Americans’ overall experiences with marketplaces leaves vital questions unanswered and feeds the volume and intensity of the controversy.
Some critical questions include: Who is trying to get on the websites and actually shop for coverage? If people were unable to enroll, what were their reasons and will they return by the end of the enrollment period on March 31, 2014. Will only the old and sick persist in their efforts to enroll, jeopardizing the stability of the new marketplaces that are so vital to the long-term success of the ACA?
This week, The Commonwealth Fund released results from the first in a series of surveys designed to introduce more objective data into the conversation. Conducted from October 9 to 27, the survey focused on adults eligible to purchase coverage in the new marketplaces—those between the ages of 19 and 64 who are either uninsured or currently purchasing coverage in the individual market. Our findings are both encouraging and concerning.
On the positive side, the survey indicates that 17 percent of those potentially eligible for the law’s new coverage options—subsidized private plans and Medicaid—have gone to the marketplaces in the past month. Given that people have six months to enroll in coverage for next year, this is not a bad start.
Second, awareness of the ACA’s marketplaces has climbed to 60 percent among potential users, from about one-third in early 2013. More than half of those eligible now know that financial assistance may be available to help them purchase insurance.
Third, the survey suggests that the age and health status of marketplace visitors is consistent with the general demographics of the eligible population. Twenty-one percent of marketplace visitors were young adults ages 19 to 29, and about half were ages 30 to 49. Visitors were also generally healthy, with nearly three-quarters describing their health as good or excellent. Older and sicker adults made up a smaller share of visitors. The interest of younger, healthier individuals in the exchanges is encouraging, and is consistent with earlier Commonwealth Fund surveys indicating that young adults do, in fact, value health care coverage.
Fourth, though only a small percentage of the eligible population reported enrolling, the survey found that a significant majority of those eligible say they’ll try out or return to marketplaces by the end of the enrollment period in March 2014. This is consistent with the Massachusetts coverage expansion experience in 2007, in which the vast majority of individuals signed up for insurance at the end of the enrollment period. A similar deadline-driven surge could take place in the first quarter of 2014. Notably, a majority of young adults and those in excellent or very good health also say they’ll shop for coverage before the March 31 deadline.
The new Commonwealth Fund survey also highlights issues that need to be monitored and addressed by policymakers if the insurance provisions of the reform law are to reach their full potential. First, our results show that many individuals who went to the marketplace had difficulty finding a plan they could afford. While the law includes generous tax subsidies or Medicaid coverage for those earning up to 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four), website problems could be preventing consumers from understanding how much coverage and care will cost them.
Respondents also reported problems comparing the benefits, premium costs, and out-of-pocket expenses under various plan options. Choosing an insurance plan from even a limited number of choices can be a frustrating and confounding experience: there are all those deductibles and copayments, in-network fees and out-of-network fees, covered and uncovered services to consider. Compared with the individual insurance market that existed before the ACA, the law substantially simplifies consumer choice by requiring insurance companies to sell plans at four benefit levels (bronze, silver, gold, and platinum) that vary only by premium and out-of-pocket cost exposure. The health benefit package is comprehensive and largely the same across plans in the same metal tier. Nevertheless, plan choices can remain difficult, especially in states that are consciously obstructing the work of navigators and others providing consumer assistance with sign-up.
Finally, consistent with many of the news reports regarding website failures, a large majority of marketplace users are reporting fair or poor experiences. The negative assessments are understandable given that many websites remain unusable.
Despite these difficulties, just over half (52%) who visited the marketplaces hold a favorable view of those options. As a whole, survey respondents are evenly divided between favorable and unfavorable views of the insurance provisions.
Our general conclusion: the marketplaces are off to a rough start, but there is time to fix the problem. Potential beneficiaries are increasingly aware of the coverage options available to them, and this includes a fair contingent of the so-called “young invincibles.” The public seems willing to stick with the marketplaces, as long as the experience improves over time.
We hope that this new Commonwealth Fund survey adds important data to the national conversation on the rollout of the major insurance expansion provisions of the Affordable Care Act, and we will continue to track the experience of individuals attempting to buy insurance in the new marketplaces. The next installment of the survey will be conducted in December 2013.