Price matters for ACA exchange customers--but it isn't the only factor

By Annette M. Boyle

Last year, 80 percent of consumers on the Affordable Care Act exchanges chose bronze or silver health insurance plans--the two lowest-cost tiers--but many did not select the cheapest plan within those tiers, according to a new report by researchers at the Urban Institute.

The report looked at buyer behavior in 2015 on insurance marketplaces run by five states: California, Connecticut, Maryland, New York and Rhode Island. Overall, it found that the majority of consumers were "highly sensitive" to monthly premium costs when selecting a plan.

Yet many consumers also consider factors other than simply price, particularly when choosing between plans that have similar premiums, the report noted. Among the other issues consumers weigh are previous coverage with the insurer, brand recognition, perceptions of customer service, and perceived breadth of the provider network.

In Connecticut, for instance, HealthyCT dropped its average silver plan premium significantly between 2014 and 2015, which boosted its market share from 1.3 percent to 17.9 percent. ConnectiCare and Anthem lost some customers to HealthyCT, but they still retained considerably greater market share despite having slightly higher average premiums than Healthy CT, according to the Urban Institute researchers.

In Maryland, CareFirst cut its average premiums significantly and obtained by far the highest enrollment on the state exchange, even though Kaiser' Permanente's average premium was somewhat lower. The report suggested that consumers may be reluctant to switch from an insurer with a broader provider network to a more restrictive one for a small difference in premium.

Overall, the Affordable Care Act's healthcare cost-containment strategy appears to be working, suggested the report, with most individuals choosing plans largely based on price and encouraging insurers to increase efficiency and rein in costs to compete for enrollees in the lower two pricing tiers.

To learn more:
- here is the report

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