Photo credit: Getty/vinnstock
Insurers offering their wares on the state insurance exchanges have encountered a quandary they apparently cannot solve: Consumers are primarily shopping on price.
“The price competition has turned out to be much more cutthroat than anyone expected,” Larry Levitt, senior vice president for special initiatives with the Kaiser Family Foundation, told the New York Times.
According to the newspaper, that has put many insurers in a tight spot. The least expensive policies on the exchanges tend to have the narrowest networks and other cost control measures in place. Insurers that are competing on price but unable to tightly manage such plans often lose money even if they are attracting large numbers of enrollees.
Consumers' increased focus on price when picking their policies suggests its importance in other portions of the healthcare sector, such as in the provider community. But little pricing data is available in that area. According to a recent study by Catalyst for Payment Reform and the Health Care Cost Institute, only seven states received passing grades for price transparency. And what little information on costs is available from providers is often too limited to make informed decisions based on costs and quality. Even in states where price transparency is mandated, such as Massachusetts, consumers often encounter significant obstacles in obtaining data.
However, some policy experts believe that the onus is on insurers to become more nimble in order to compete directly for consumers. “We have to be realistic. You can’t lower costs without breaking some eggs,” Linda J. Blumberg, a senior fellow with the Urban Institute, told the New York Times.
The exchanges do have some options for creating a more viable market for insurers, such as attracting healthier enrollees whose medical costs are easier to control, or tightening provider networks, although the newspaper said that means the exchanges could eventually resemble Medicaid managed care plans, with a relative dearth of providers in exchange for low premiums.
– read the New York Times article