Tools ease choice of health insurance
As the number of people with higher-deducible health insurance plans increases, and consumers clamor for a better understanding of costs, more insurance providers are providing tools to aid in transparency.
An annual census by the national trade association America's Health Insurance Plans shows enrollment in high-deductible health plans rose to nearly 17.4 million in January 2014, up from 15.5 million in January 2013.
The average PPO plan deductibles are trending upward, from $822 in 2014 for single coverage to an average of $909 in 2015, and an average of $1,669 in 2014 to $1,863 for family coverage in 2015, according to a survey conducted and released last week by the Troy-based Marsh & McLennan Agency.
According to the survey, 88 percent of HMO plans offered by employers now include co-insurance, up from 57 percent in 2014; at the same time 68 percent include a deductible, up from 59 percent in 2014.
The changeover to higher-deductible health care plans predates the 2010 Affordable Care Act, and it's a driving factor behind the new transparency in health care costs, said Tom Buchmueller, a professor at the University of Michigan's Ross School of Business.
"If you think about any other kind of market, one of the things that govern sellers is if consumers have good price information," said Buchmueller. "Patients have to become consumers. You have to arm them with information. This issue is not going to go away."
And while the quality of certain medical procedures doesn't always vary greatly, prices can be dramatically different depending on the location and kind of facility where the treatment is given.
"Multiple factors contribute, including proprietary negotiations between insurers," said Dr. Richard Hirth, a University of Michigan professor of health management and policy. "For example, a hospital might be particularly important for an insurer to have in its network, or an insurer might be particularly dominant in a local area."
Procedure cost variation was something that motivated Michigan health insurance provider Priority Health to release its Cost Estimator tool.
Launched in January, the new website and app make it easier for customers to compare prices for routine medical procedures such as mammograms and colonoscopies, and find a nearby facility where the price will be the lowest — whether it's freestanding, part of a medical group or a hospital. Those procedures are among the preventative measures that the health care act says must be covered by a health plan for it to be compliant.
The services are customized to the policy holder, so the price estimates are more accurate, said Joan Budden, chief marketing officer for Priority Health.
"We want it to be about all the procedures that you're going to go in and schedule weeks or months in advance," said Budden. "It's not for the ER, not for bypass, not lung transplants. It's all lower-end services."
Priority Health serves about 650,000 people in Michigan. Price estimator tools aren't new to the industry, although they are becoming more sophisticated, said Rick Murdock, executive director of the Michigan Association of Health Plans.
When it comes to health care, there typically are two kinds of cost estimators. The first is for a health insurance premium and can be found in Michigan and nationally. Healthcare.gov and other national sites will usually provide these estimates to people as they shop for coverage.
The second kind estimates the individual costs for a specific treatment or procedure — and these are harder to find.
The Priority Health Cost Estimator is a good example of the latter, said Murdock.
"With individuals now having more personal pay responsibility under health insurance, the industry is moving quickly to provide tools to assist consumers to make more informed decisions," said Murdock. "And clearly Priority Health is a leader in this direction."
The health care act is pushing health care providers away from a cost-based system to a population health-based system with a focus on prevention, said Budden. At the same time, she said, consumers are becoming savvier and taking a more active role in understanding their health, the services available and the associated costs.
"Because we're all getting more exposed to health care costs and deductibles, people are becoming more aware of what things cost," said Budden. "The world is just going that way. It's this whole age of consumerism and the activism of consumers."
Other leaders in transparency are national providers Aetna and UnitedHealthcare.
Aetna's nearly 227,000 members in Michigan have access to the provider's Member Payment Estimator, which has been around since 2010. Originally, the tool showed geographic averages in prices, but eventually was updated to provide information specific to each policyholder.
The tool, which has had 5.5 million hits online, has cost estimates for more than 650 medical services. On average, members have saved $170 out of pocket on procedures and $610 out of pocket on the top 20 most searched procedures, said Chris Riedl, executive director of product strategy and management.
"Health care is one of those last few things left out there where you don't know the cost of things until after you have the service done and you get the bill," said Riedl. "Imagine buying a car or any other goods and not knowing how much it will cost you until after you buy it. We absolutely believe all consumers should have access to this information."
UnitedHealthcare, which serves more than 720,000 people in Michigan, offers price estimates and quality of service indicators on its myHealthcare Cost Estimator and Health4Me mobile app.
Last year, consumers used the estimator to price $3.7 billion in procedures, said Tim DiMartino, vice president of sales and account management at UnitedHealthcare of Michigan.
"I think price and quality comparison will become the standard," said DiMartino. "It's important to include quality measured by their own medical society data, not just reviews or anything we are putting out there."
Blue Cross Blue Shield, the largest insurer in Michigan, serving nearly 4.5 million customers, has offered price estimates on its website since 2012, but will be launching more comprehensive and customer-specific tools by the end of the year.
The biggest push for these tools is coming from customers, said Kathryn Levine, vice president, corporate marketing and customer experience.
"We live in the age of the consumer. People are becoming 'infovores,' " she said. "There's just a general acceptance that information should be at their fingertips."
The cost of care
These insurers' websites offer links to cost estimators for medical procedures. In most cases, you must be a policyholder to access the information.
Blue Cross Blue Shield of Michigan: www.bcbsm.com