Prices determine plan selection on ACA exchanges

A recent Managed Healthcare Executive article suggests that individuals’ decisions to purchase plans on the health exchange were largely price-driven. According to the article, Milliman’s Tom Snook agrees that buyers were more price-sensitive than many anticipated.”

Managed Healthcare Executive published the graphic below showing the percentage of plans selected by tiers.

Offering less expensive plans under a “copper” tier has also been suggested, although data is needed to establish rates and learn who may benefit from such plans. In the article, Snook addresses the challenges insurers face setting rates for existing tier plans ahead of 2015:

Because of the confusion accompanying the rollout of the insurance exchanges, [insurers] have not yet yielded much insight into how accurate rate setting will be for 2015. However, this lack of data is not surprising to executives of health plans. “They knew going in that they would be flying not entirely blind but close to it for 2015,” says Snook. “Even if they know their risk profile they don’t know how they compare to the rest of marketplace.”

…“There is a sense that 2015 may be the first real year of ACA experience,” he says. However, he believes that health plans are still likely to see a lot of unexpected developments and that it will take several years for things to settle into a recognizable pattern.”

For more of Tom Snook’s perspective on healthcare reform, click here.

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