Evaluating health carriers: Key takeaways
- Health plan buyers should look not just at premiums, but at carriers as well.
- Check an insurance company’s financial stability by looking at its financial rating and rate increases.
- Review your health plan’s network of physicians.
- Pay attention to a carrier’s customer service – starting with your first interaction.
- New star ratings can help you compare plans. So can a report card from the National Committee for Quality Assurance.
Premiums shouldn’t be your only concern
When you’re debating over where to spend your money for the best possible health insurance coverage, there’s plenty to consider – and it’s not just the premiums and out-of-pocket costs. Before you start seeking health insurance quotes, it’s prudent to take a look at the health insurance companies and their potential service to you as a consumer.
In ACA-created health insurance marketplaces (exchanges), consumers have access to one-stop shopping for individual health plans. The plans that are available for sale in each state’s marketplace are ranked according to metal levels (Platinum, Gold, Silver and Bronze, although many areas of the country no longer have any Platinum plans for sale) based on the percentage of costs that they cover for a standard population.
The metal level distinctions make it easier to compare plans, and some states even have standardized health plans available, which makes plan comparison even easier. Individual major medical plans sold outside the exchange are ACA-compliant as well, which means they use the same metal-level classifications (consumers who qualify for premium subsidies and cost-sharing subsidies should purchase policies within their state’s marketplace, as that’s the only place the subsidies are available).
And there are some basic rules that apply to all ACA-compliant individual (and small group) plans, including a requirement that essential health benefits be covered, an upper limit on out-of-pocket costs ($7,900 for a single individual in 2019, increasing to $8,150 in 2020), and a ban on lifetime and annual benefit maximums.
In your evaluation of an insurance company, you should ask yourself questions that include the following:
- Is the insurance company financially stable?
- Will the company make it easy for you to switch physicians if necessary? Will they require you to get a referral to see a specialist?
- Will the company respond quickly to your concerns, and is customer service a high priority?
- What quality rating does the insurer have? (data on this will be available as of November 2019, via the health insurance exchanges)
- How common are consumer complaints against the insurance company?
Financial rating and rate increases
An easy place to start is your prospective insurer’s financial rating. Free resources, such as A.M. Best’s Financial Strength Ratings provide online ratings of insurance companies and their ability to fulfill their financial obligations to the consumer.
Health insurance carriers raise their premiums annually in line with the rising cost of health care. The ACA provided funding for states to be better able to review the rates that carriers file and make sure that increases are justified. The process is now more transparent and it’s easier than ever for consumers to check on a carrier’s rate increase history before applying for a policy.
But rate increases have been all over the map since ACA-compliant policies debuted, with fairly small rate increases in 2015, particularly large rate hikes in 2017 and 2018, and then fairly small rate increases (and even some rate decreases) for 2019 and 2020. The ACA’s medical loss ratio requirements ensure that health insurance companies have to spend at least 80 percent (85 percent for large group plans) of premium revenue on medical claims and quality improvements, leaving just 20 percent (or 15 percent) for administrative costs. Rebates are sent out each fall to consumers and businesses that were enrolled in health plans that failed to meet that requirement.
If you have individual market coverage through the exchange in your state, you may be eligible for premium subsidies that will help to lower the amount you have to pay each month to buy your health coverage. The subsidy amounts change each year, to keep pace with the cost of the benchmark plan‘s premium. So if you’re subsidy-eligible and willing to potentially switch from one plan to another each year (depending on how premiums change, relative to the benchmark plan’s premiums, for the various plans available in your area), the subsidy amounts will ensure that your coverage remains affordable from one year to the next.
Who provides your health care and how does the plan utilize managed care?
Take a look at a health plan’s network of physicians – and take a look at the physicians. The American Medical Association offers free basic information about every licensed physician in the United States. Healthgrades.com is another good resource for comparing providers. Your local library also likely carries the Official ABMS Directory of Board Certified Medical Specialists.
Another big factor to take into consideration is the managed care network model of the plans you’re considering. HMOs and EPOs have become the most common types of coverage available in the individual market in most states, although there are some areas where PPOs and POS plans are also available. These types of network/managed care designs vary considerably, and you’ll want to make sure you understand how they work before you select a plan.
Some insurers offer multiple types of network/managed care designs, while others, for example, only offer HMOs, or only EPOs. In some areas, there’s not a lot of choice in this regard, but in other areas, there are multiple types of network/managed care plan designs available. Some will require you to pick a primary care provider and use that provider for referrals when you need to see a specialist, while others will let you see any in-network doctor you like.
From the very start of your interaction with an insurance company, you can gauge their customer service by noting the way they respond to your questions (and hopefully, you’ll have many). Are they sympathetic to your individual needs? Are they trying to help solve your problems? Do they respond quickly to emails and/or phone messages? Do they respond in a meaningful way to consumer inquiries on their social media platforms? Talk to friends and co-workers to get their opinions of the customer service provided by the insurance companies they use.
Star ratings: Available nationwide as of November 2019
The ACA (aka Obamacare) [Section 1311 (c) (3&4)] called for the exchanges to create a quality rating system for insurers, and display that information so that exchange enrollees can see it. That provision was implemented nationwide in the fall of 2019, in time for the open enrollment period for 2020 plans (it had already been phased in by some state-run exchanges and in pilot program areas in states that use HealthCare.gov).
The new star ratings are based on a quality rating system (QRS) designed by CMS, along with feedback from enrollee surveys. According to CMS, star ratings provide information about health plan quality based on metrics such as “how well doctors coordinate with enrollees and other doctors to provide the best care, whether the plan’s network providers give members health care that achieves the best results, and
how other enrollees rate their doctors and their care.”
The exchanges (as well as web brokers that utilize HealthCare.gov’s direct enrollment pathway) are using a 5-star system (5 = highest quality) for all health plans that have been operational for at least three consecutive years and have a least a minimum number of enrollees. In the federally-run marketplace at HealthCare.gov, about two-thirds of the plans available for 2020 have star ratings and the other third do not.
For plans that receive a rating, there is an overall rating, as well as ratings for medical care, member experience, and plan administration. The idea behind these ratings is to make it easier for consumers — who may have little or no personal experience with the various companies offering plans in their area — to compare one plan to another based on the various metrics in the star rating system.
But the ratings are only useful to a certain extent, as Lauren Weber and Phil Galewitz explain: In 24 percent of US counties, there is only one insurer offering plans, so consumers aren’t comparing insurers against one another. And nearly a third of the plans available on HealthCare.gov do not have a star rating at all this year (because they’re either too new or too small), and that includes all of the available plans in Iowa, Kansas, and Nebraska. And although about 80 percent of the plans available via HealthCare.gov that qualified for ratings received at least three stars, there are five states where at least some of the plans have ratings but none of them earned three or more stars (Missouri, Nevada, New Mexico, West Virginia, and Wyoming). So while the star ratings can be a useful at-a-glance tool, they might not be helpful to consumers in all areas.
Other ways to compare health plans
The National Committee for Quality Assurance also provides an online Report Card that allows you to compare plans based on criteria that includes member satisfaction.
You can also do a Google search of each company’s name for articles OR a search pairing the company name with the word “complaints” or “violations.” You can do the same with the name of your state plus “insurance commissioner” and “complaints” to see the number of complaints filed against a carrier — state insurance commissioners generally maintain this information in a publicly-available database, but if you can’t find it on your state’s insurance department website, you can contact them and ask for it.
Once you’ve done your homework on health insurance companies’ customer service, financial stability and policy quality, your research comparing health insurance quotes will be that much easier.
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