Insurers selling public exchange plans last year faced a lot of uncertainty. This year it's a bit better, but the plans remain a product design experiment with confounding variables in an environment much in flux.
"There is no national silver bullet to product design," said Adam Pittler, UPMC Health Plan senior product manager, at AHIP Institute 2014 in Seattle on Wednesday. But there are a lot of plans waiting to be sold in public and private exchanges -- with perhaps 25 million Americans buying public exchange plans and 40 million buying private exchange plans by the end of the decade.
The question is who will sell them: Will incumbent insurers retain their market shares, protected by historical boundaries at the regional and state level? Or will new entrants and ambitious growing companies attract consumers newly-subsidized or freed from group plans?
"Price is paramount, but at some point price is going to converge," which means benefit designs, networks and branding are going to weigh more on the minds of shoppers, said Pittler.
UPMC Health Plan, the country's second-largest provider-owned plan, moved into the individual market in 2012 and started selling exchange policies last year. To guide their exchange plan designs, the organization simulated the exchange experience for focus groups with four benefit designs.
One thing they learned, Pittler said, is that consumers don't like the idea of coinsurance. It also gave them insights into network marketing. "What we need to think about is not narrow networks necessarily, but high quality networks," he said.
Experimentation
Across the country, the six insurers of Cambia Health Solutions, including the Regence Blues of Oregon, Washington, Idaho and Utah, took a similar consumer survey strategy before launching exchange plans -- but ended up going in a different branding direction, said Bill Bradley, VP of product management at Cambia Health Solutions.
The company kept the Regence Blue Cross and Blue Shield plans for off-exchange sales, but decided to create a new insurance brand for the exchange, called Bridgespan.
"It's going to be important to have both a company and a brand that is exclusive to this part of the market," said Bradley.
In crafting plans for various benefit tiers, Cambia divided its target members into seven segments, including empowered embers, dependent patients and DIYers.
On and off the public exchanges, UPMC Health Plan, Cambia's insurers and others are still experimenting with new designs for benefit offerings and cost-sharing, of course within the confines of the Affordable Care Act. And some are going far out.
Arches Health Plan, the ACA-funded cooperative plan in Utah, offers a "waiver of deductible for accidents" on all of its off-exchange plans. The message is: Go ahead young invincibles, go mountain biking, rock climbing and skiing. We've got your back.
In Mississippi, Humana offered to waive fees for new enrollees who see a doctor by the end of June -- for non-preventive visits.
All of these developments are part of many experiments in product design, said Brett Graham, president of Leavitt Partners Development and a former UnitedHealth Group president.
"Exchanges are mechanisms for evolution into future products," said Graham. Payers are partnering with health systems with strong brands in certain regions to co-brand health plans, and some are starting to do likewise with ACOs, he said.
But, argued Cambia's Bradley, there's one thing in exchanges that threatens all of this new product design -- sorting of plans.
Some states do it by premium price, and some let consumers choose the factors to select, such as cost-sharing or network size. But in states with more than five or six carriers and each offering multiple plans in each benefit tier -- like Oregon -- some insurers may never get the chance for the products to be seen.
If a would-be shopper doesn't even see the plan as an option, all the other work goes by the wayside -- "little else matters," Bradley said.