The second open enrollment period under the ACA begins on November 15th – as this date rapidly approaches, here are some highlights of what we can expect to see in the public exchanges.
Compared to last year’s launch failures, we can expect to see the basic technology working this year. While it may not “wow” us yet, the major problems that plagued consumers last year have been fixed. There is still plenty of behind-the-scenes stuff that doesn’t yet work (carrier and Medicaid interfaces), but that won’t affect the consumer shopping experience. There are still a few states struggling to meet the November 15 deadline to re-launch (including Massachusetts and Maryland), while some other states gave up on their technology and have moved to the federal exchange platform (e.g. Nevada and Oregon).
As for the SHOP exchange for small businesses, the federal government expects to be ready to roll theirs out this fall. Given that it’s been largely paper-based so far, there is nowhere to go but up!
Expected Result: Higher levels of consumer satisfaction with the enrollment experience.
Last year’s open enrollment period was announced with a great deal of fanfare. And the publicity and outreach efforts continued through 6 full months of open enrollment. This year’s open enrollment will still be publicized, but there are fewer public dollars to spend. The initial federal grant funds are drying up, and state exchanges have to rein in spending to become self-sustaining. Insurers may fill in with ad spending of their own, but there will be fewer exchange ads and fewer Navigators to help consumers. In addition, the open enrollment period is 3 months shorter this year.
Expected Result: A smaller enrollment surge than was seen in 2014.
Consumers will have even more choices on the exchanges this year:
- More insurance carriers: There will be a 25% increase in the total number of carriers selling health insurance plans on the federal and state marketplace exchanges (almost 70 have been added).
- More products: There is a 66% increase in the number of products being sold.1 Most of these are in the silver tier, which is the level that two-thirds of consumers purchased on exchanges.
Expected Result: More competitive pricing (and possibly more consumer confusion).
MODEST PRICE INCREASES, ON AVERAGE
One analysis suggests that there will be a median increase of 4% for exchange renewal products in 2015.1 This masks a wide range of price changes that consumers will face (highs and lows). The good news is that there are many products that will be priced lower in 2015 than the lowest priced products in 2014. Some of these low-priced products are being offered by new entrants, others are from existing players. In many cases, consumers will need to switch carriers to access the cost savings.
Expected Result: Consumers will see exchanges as a worthwhile place to shop, and exchanges are likely to retain members.
The private market hasn’t given up on exchanges – there is more carrier interest and a good deal of competitive pricing. Whether there will be sufficient consumer interest to continue the enrollment gains made in 2014 is an open question. There will be less outreach spending to bring in consumers, but the fundamental value proposition of exchanges for individual consumers (competition and choice) is there.
1. McKinsey: Based on data from the 19 states with complete product filings.