Open enrollment: Time for consumers to whack the piñata

Medical bills are the number one cause of bankruptcy in this nation.  On its face, protecting the uninsured from financial ruin is reason enough to drive health policy that encourages universal coverage.  However, a look deeper shows that over 78 percent of the millions declaring bankruptcy from personal health care costs had health insurance.  And that’s troubling as we approach the second year of open enrollment (or for many reenrollment) for the insurance exchanges. Over the course of the year, little has changed around how much relevant information consumers can access when shopping for a plan.   

I liken the current state of information in healthcare, but particularly around exchange (re)enrollment, to the folly of whacking a piñata at a kids’ birthday party. (Unfortunately, the comparison falls short of the piñata’s ‘fun factor.’) You’re blindfolded, spun around and then pointed towards a suspended target – one that you’re hoping to nail! The current state of choosing the right health plan feels similar. You don’t know anything about the actual medical costs. You’re dizzy from the amount of jargon that insurers use. And you’ve only got a faint idea of what you need – even though your financial security is at stake. 

{mosads}Open enrollment presents the opportunity to take an honest look at the challenge consumers face choosing the right health benefits. Health plans try to give useful information about costs, but most of the percentages used as guard rails for cost responsibility just end up ringing hollow to consumers. 

That’s because there is a lack of cost and quality information available to consumers. They don’t know how much it costs to visit a dermatologist or take a simple X-ray. And it’s nearly impossible for them to tally the amount of a care episode, like pneumonia or a coronary bypass.  

Access to meaningful price and quality comparison data would enable consumers to carefully evaluate and compare health plans. Instead, too many consumers are either over-insured or underinsured. While perhaps more obvious with respect to the underinsured, both aren’t good for people’s financial security or the system as a whole.  

The over-insured are often wealthier and have corporate sponsored insurance. But far from making health care free, these workers end up paying high premiums to avoid deductibles. There’s the convenience of not having to worry anything more than small co-pays. Yet, they may be better off downgrading to a cheaper plan and having more in their weekly paycheck.  

Conversely, the underinsured can’t afford the upfront premiums – but skyrocketing deductibles aren’t any more affordable. According to this year’s Kaiser Family Foundation report, 80 percent of all covered workers face a general annual deductible – the average of which is $1,217. For a family of four, that could add up to $4,868 out of pocket before insurance even begins to kick in. 

Fortunately, there are green-shoots bringing choice into focus. CMS is sharing  information, insurers are becoming more forthcoming as their industry becomes more competitive, young disruptors like Vitals and others are working closely with those who hold this information to enable consumer discovery in a form that is digestible and therefore actionable.   

The sum of these efforts could still be characterized ‘early days’ and its impact on year two enrollment will not be the one to which we should aspire (a marketplace with understandable cost and quality info for all to see), but we are seeing progress.   

However as those who follow the financial markets like to say, ‘the trend is our friend.’  As high deductible health plans (HDHPs) become the norm and impact pocketbooks, consumers will make their voices heard, compelling the parties that have long held back cost information to free it.  Whether this will be incremental or all at once; in broad datasets or well-designed forms that allow for easy interpretation, we do not know.  But make no mistake, its coming.   

Open enrollment with regard to transparency is an important highway marker, but in the scheme of things just another event.  The stakes couldn’t be higher.  To that end, we need to continue to work towards eliminating all the comparisons choosing a health plan has with whacking a piñata, with the exception of the rush of excitement and ‘fun factor’ we might aim to bring to insurance shopping in the future.  

Rothschild is the CEO of Vitals, a company that connects patients to quality, cost and accessibility information so that they can make informed decisions about their health-care providers.