A buffet of confusing choices on health insurance exchanges

Brian Feeley

I buy my lunch at the local Mega-Supermarket. There’s a section for every type of food imaginable. Hot, cold, diced, sliced. It doesn’t matter what I want—they have it. I typically don’t have an issue selecting my main course (Chicken Caesar Salad mostly…extra croutons). But as I make my way over to the drink case, which easily spans 30 feet, my brain begins firing rapidly as it tries to ascertain which iced tea will go best with my seasoned romaine. Perhaps dark mint sweetened lemon extract will do the trick…no maybe an Arnold Palmer…or how about the old traditional…still not sure…and brands…so many brands. The bottles all look different. Prices are about even, but which bottle contains more? The tall one…or the fat one…plastic…glass….I can’t decide.

As a society, we crave more options, but then fret over the difficulty of making a decision. Greater choice often does not lead to more satisfaction. While it certainly can’t be labeled a negative, it doesn’t automatically satisfy the craving for those trying to make a decision. The problem is called “choice confusion.”

Consider group healthcare benefits. Employees are accustomed to very little choice because most of them get their benefits at work. They select from one or two health plans, one dental plan and one vision plan. It’s A or B, yes or no. Simple. Maybe not very customized to individual needs, but the decision process isn’t too complicated.

One of the concepts underlying the Affordable Care Act is that it provides choice to healthcare consumers. Regardless of the product or service, a buffet of choices is almost always seen as a good thing. It’s empowering, or is it?

Now, with the introduction of health insurance exchanges (both public marketplaces and private exchanges) plan participants will be going from one or two choices to 10 or 12. When you offer multiple health plans, multiple vision, multiple dental, multiple accident, multiple disability, etc., you get an exponential number of combinations. That’s confusion!

That is a major difference for consumers who historically have not had to spend much time studying their options and developing an understanding of what health insurance plan is best for them. Now, they are faced with having to understand what they’re buying.

This will create a difficult scenario for many consumers. In absence of a thorough understanding of their group employee benefits options, they may default to selecting an insurance plan based on price, rather than what is best for their circumstance. You’d hate to see a family with six young kids pick a cheap, high-deductible plan.

To avoid choice confusion, education is a must. The public marketplaces have created a system designed to guide consumers to a suitable plan for their situation. These medal levels—bronze, silver, gold, platinum—are tied to the actuarial value of various plans. In other words, all bronze plans are roughly the same. These guardrails will help consumers choose a policy that satisfies their particular circumstances. However, it’s a very simplistic approach and it leaves gaps, particularly when it comes to so-called “extra products” such as dental, vision, life, voluntary benefits, etc.

For employers who choose to place their employees into a private exchange, there is an opportunity to provide a higher level of guidance. But businesses that choose this alternative benefits delivery system also have to provide employee education and communications. Employers have a direct pipeline to their employees through internal communications. They will have more success and more satisfied employees if they deliver smart, user-friendly benefits education materials through this channel.

Employees need guidance at the point of decision, such as online enrollment tools. Those marketplace solutions that incorporate robust decision support tools, aided by storyboards and talking avatars, help empower private exchange users to make the right decision for their unique circumstance. These tools consider a number of factors through an online assessment prior to making plan recommendations. The best private exchange technologies assess an individual’s risk tolerance, as well as their specific medical requirements, and return recommendations that best fit those needs.

With education and technology, employees who get their healthcare coverage through a private exchange overcome the potential for choice confusion. They feel secure in their decisions regarding their health and well-being and gain an appreciation for their benefits.

Now if only there was a decision support tool to help me select the right iced tea.

Gotta go—it’s time for lunch.


©2015 Corporate Synergies Group, LLC. No part of this material may be republished or distributed without prior written consent.