The federal government created direct enrollment (DE) to give insurance companies and brokers the opportunity to sell healthcare plans on their individual websites. However, a new report from the the Center on Budget and Policy Priorities warns that DE can be deceptive and may be opening consumers to privacy issues.
While it used to be that consumers would submit a single application in the marketplace to learn what health coverage they are eligible for, in 2019 there are many options for applying to plans and Affordable Care Act (ACA) subsidies, according to the report. But more options are not necessarily good for consumers, as it raises several concerns including the protections of the ACA marketplaces.
In 2018, agents and brokers helped with 42% of all HealthCare.gov enrollments, 39% of which were DE.
According to the CBPP report, many DE platforms offer short-term plans and other health coverage that does not comply with ACA standards. Primarily, the programs are hoping to enroll as many consumers as possible so that the agents and brokers can collect on the high commissions.
Also, many of these DE sites use screening tools to try and draw consumers away from marketplace options, raising privacy issues of sharing personal information that can be used to market future noncompliant plans.
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In addition, people who are eligible for Medicaid may face additional barriers for enrollment on a DE site. For example, some DE websites divert users from the marketplace before they even reach it, leaving the consumer without the knowledge that he or she may be eligible for no-cost coverage.
"I was shocked that lowest income consumers aren’t given complete information about their eligibility for Medicaid," Tara Straw, senior policy analyst at CBPP, told FierceHealthcare. "And regulations have a giant hole that sanctions that."
Plus, DE sites can often take away the competition, robbing consumers of the right to compare private health plans side-by-side for price and quality. In fact, many DE’s offer financial incentives to steer consumers toward certain insurers. But, according to Straw, the listing of policy comparisons does not even make good business sense for DE.
"If they're showing a menu of plans that are unsubsidized, and no one is going to be able to pay for them anyway, it’s a good case—even a good business case—for doing the right thing by the consumers and letting them know what real options are," she said.
But will DEs be more regulated any time soon? A recent Trump Administration proposal would expand the power of DE by allowing insurers to enroll consumers using a pathway instead of a marketplace.
In addition, in 2019 the Center for Consumer Information and Insurance Oversight, an agency within the Centers for Medicare & Medicaid Services, launched enhanced direct enrollment, which allows companies to collect application information through websites, submit it to the marketplace and report back to the consumer—meaning the consumer never even interfaces with HealthCare.gov. So far, nine entities have been approved for EDE.
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Platforms using EDE, however, say it pays off for consumers.
George Kalogeropoulos, CEO of HealthSherpa, calls EDE the “Turbotax for Marketplace” that will help more people get coverage and stay covered. HeathSherpa was the first tech company to join forces with HHS for EDE.
“There are millions of people who qualify for marketplace coverage and don’t know about it. Many of those who have it don’t understand it,” he told FierceHealthcare. “With EDE, we can make the marketplace more accessible by...integrating enrollment with the HR workflows of employers, patient onboarding by providers and the programs offered by nonprofits and community organizations."
"We can also make it easier to keep your coverage by streamlining renewal, the submission of required documents, and the process of reporting life changes that affect your coverage,” he added.
In its public comments on the 2020 Notice of Benefit and Payment Parameters, HealthSherpa strongly pushed for DE regulation that creates the right incentives.
“We believe EDE pathways should be required to show all marketplace coverage options...on equal footing, facilitate enrollment in all marketplace coverage options, not bias sorting/recommendation or display in any manner and keep inferior coverage options completely separate from QHPs and Medicaid, with prohibitions on marketing them during open enrollment,” Kalogeropoulos said.
Still, CBPP's Straw says there are still things that the agency could do to improve direct enrollment for consumers. First, she notes making a commitment to protect the lowest income consumers—those eligible for Medicaid.
Another action could be that as they consider approving new EDE entities, the agency could not admit any companies that sell noncompliant ACA plans. Finally, she'd like to see them tighten display requirements so that consumers can better understand all of the information they are given on their web searches.
"It's about following today's regulations and then making the ones that exist tighter," Straw said.