Last time, I took issue with the Associated Press's characterization of HHS's proposed application for Exchange insurance eligibility, making the case that, considering all the information they have to gather in order to assess income and other eligibility factors, they actually didn't do all that bad of a job.
But, there is one glaring problem that, so far at least, I've not seen anyone point out. It surfaces in the text that appears right beneath the signature lines:
Can you imagine going to the mall and not being allowed to enter and browse until you fill out a form and get approved?
Perhaps not surprisingly, since this process has been designed by the Centers for Medicare and Medicaid Services, that this application process works just like Medicaid: first you apply to determine whether you are eligible for Medicaid coverage and then, once you've been approved, you select the plan you want. It makes total sense in the Medicaid world, since you are apply for a public assistance program, and the eligibility determination is the biggest and hardest part.
But, to those coming from the commercial insurance world it turns things on their head. In that world, you shop and select your plan first, and you fill out an application only when you've decided what plan you want to buy. The only real thing that determines if you're "eligible" to shop is whether you live in that carrier's service area, and all it takes is a ZIP code to figure that out.
It's long been a best practice in commercial insurance sales that you require users to enter as little personal information as possible until you absolutely have to have it. You need to know people's age and ZIP code to provide a premium rate quote, so a user does have to enter that in, but no online brokerage or carrier sales site requires you to enter your address and phone number just to shop. It's been well established that the greatest "session abandonment" (i.e. people leaving the site) occurs at the point where they have to enter their full name and contact information. Why? Because they are just shopping around and aren't ready to apply yet.
Watch CMS's YouTube demo video of the online application, and you'll see that their flow breaks these best practices in several ways:
Only after these three steps can you specify whether you even want to apply to get help paying for health insurance.
Who knows--maybe this will work out okay for the Exchanges. Costco, for instance, does a bang up business, and you have to apply for membership before being allowed to browse. But, the trade off is that once you get in the door you can buy a zillion rolls of toilet paper for a couple of bucks.
But, in the insurance world, consumers will pay the exact same premium for plans purchased on the Exchange as they will for plans purchased through a private brokerage or directly from a carrier, unless their income qualifies them for a subsidy. (Subsidized plans can be purchased only through the public Exchange.) There are plenty of companies already offering exchange-like multicarrier private marketplaces and more rushing to launch new ones.
The danger for Exchanges is that having a high bar to get in the door will mean that the only people who will shop on the Exchanges will be those that have below 400% of the Federal Poverty Level and are thus eligible for a premium tax credit. And that's exactly the sort of two-tiered approach that policy makers have been trying so hard to avoid. Let's hope they figure it out and scramble the order of operations in the shopping and enrollment process.
But, there is one glaring problem that, so far at least, I've not seen anyone point out. It surfaces in the text that appears right beneath the signature lines:
Congratulations, you’re done! What happens next?
We’ll contact you in 1–2 weeks and let you know how to take the next steps, like joining a health planThis is one the big, fat problem in the whole mix: with this form (and this is the form for someone not applying for any government subsidies) you are not applying to be covered by a particular health insurance plan but rather applying to be allowed to shop for health insurance.
Can you imagine going to the mall and not being allowed to enter and browse until you fill out a form and get approved?
Perhaps not surprisingly, since this process has been designed by the Centers for Medicare and Medicaid Services, that this application process works just like Medicaid: first you apply to determine whether you are eligible for Medicaid coverage and then, once you've been approved, you select the plan you want. It makes total sense in the Medicaid world, since you are apply for a public assistance program, and the eligibility determination is the biggest and hardest part.
But, to those coming from the commercial insurance world it turns things on their head. In that world, you shop and select your plan first, and you fill out an application only when you've decided what plan you want to buy. The only real thing that determines if you're "eligible" to shop is whether you live in that carrier's service area, and all it takes is a ZIP code to figure that out.
It's long been a best practice in commercial insurance sales that you require users to enter as little personal information as possible until you absolutely have to have it. You need to know people's age and ZIP code to provide a premium rate quote, so a user does have to enter that in, but no online brokerage or carrier sales site requires you to enter your address and phone number just to shop. It's been well established that the greatest "session abandonment" (i.e. people leaving the site) occurs at the point where they have to enter their full name and contact information. Why? Because they are just shopping around and aren't ready to apply yet.
Watch CMS's YouTube demo video of the online application, and you'll see that their flow breaks these best practices in several ways:
- You have to set up a user account before you shop
- You have to read and agree to a pretty hefty disclaimer allowing the government to query data sources and use personal information before you even know if you need to bother applying for financial assistance
- You have to enter your full contact information before you can shop
Only after these three steps can you specify whether you even want to apply to get help paying for health insurance.
Who knows--maybe this will work out okay for the Exchanges. Costco, for instance, does a bang up business, and you have to apply for membership before being allowed to browse. But, the trade off is that once you get in the door you can buy a zillion rolls of toilet paper for a couple of bucks.
But, in the insurance world, consumers will pay the exact same premium for plans purchased on the Exchange as they will for plans purchased through a private brokerage or directly from a carrier, unless their income qualifies them for a subsidy. (Subsidized plans can be purchased only through the public Exchange.) There are plenty of companies already offering exchange-like multicarrier private marketplaces and more rushing to launch new ones.
The danger for Exchanges is that having a high bar to get in the door will mean that the only people who will shop on the Exchanges will be those that have below 400% of the Federal Poverty Level and are thus eligible for a premium tax credit. And that's exactly the sort of two-tiered approach that policy makers have been trying so hard to avoid. Let's hope they figure it out and scramble the order of operations in the shopping and enrollment process.
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