Health plan satisfaction. Almost sounds like an oxymoron, doesn't it? The process -- from searching for and purchasing a health plan, to setting up appointments with physicians and being referred to specialists as needed -- can seem like a hassle more times than not.
However, according to a recently released report from J.D. Power last week, health plan satisfaction rose among the 31,867 commercial health plan members surveyed in 2016 for a second consecutive year, and it now sits at its highest level since the Affordable Care Act (which you likely know better as Obamacare) went into effect at the beginning of 2014.
Health plan satisfaction rises again
J.D. Power, which uses a 1,000-point scale where a higher score equates to higher member satisfaction, notes that health plan satisfaction edged higher by nine points in 2016 to 688. It also jumped in 2015 to 679 after hitting a low-water mark of 669 in 2014.
What's influencing this steady rise in customers' satisfaction with their health plans? J.D. Power observed a distinct difference, in many instances, between regions that had a competitive landscape among insurers versus regions where one health-benefit provider controlled in excess of 50% of market share. This would certainly make a lot of sense logically since a competitive environment would encourage insurers to compete with each other on price and benefits offered in order to lure in new members and retain existing ones. Conversely, minimally contested regions offer few incentives for major players to lower their premiums to competitive levels.
Specifically, the report cites a four-point advantage in member satisfaction in competitive markets in plan cost (610 versus 606), a three-point gap in customer service satisfaction (743 versus 740), and a five-point difference in information and communication (646 versus 641).
The one anomaly observed between competitive regions and single-plan regions was "provider choice with their plan." There, there was an 11-point satisfaction advantage (759 versus 748) for the non-competitive regions, which likely ties into the fact that less competitive regions are likely to have simpler, and fewer, plans to choose from. Sometimes too many choices can overwhelm consumers, and this is likely the source of this satisfaction disparity.
Including all 18 regions, plan satisfaction was most positively influenced by coverage and benefits (+12 points), information and communication (+11), and customer service (+10) in this year's survey.
Here's the big surprise
But there's an even bigger surprise than just the fact that health plan satisfaction rose once again. Among the key findings of J.D. Power's report was that there was a slight decrease in monthly premiums for family plans and individual plans. Family plan monthly premiums dipped to an average of $355 in 2016 from $374 in 2015, while individual plan premiums dropped $9 to $207.
What makes this so surprising is that we're seeing the exact opposite effect play out in Obamacare's marketplace exchanges. An analysis conducted by Kaiser Family Foundation of 50 major cities across 49 states estimated that average premium price increases were set to hit 10.1% in 2016. A separate analysis from Freedom Partners, which looked at all states individually, noted similar large price jumps, including four states with premium price hikes expected to reach at least 30% on average.
The primary concern appears to be that a number of insurers failed to effectively and realistically price their plans over the first two years of Obamacare's official implementation. That's a problem, because healthfully profitable insurers were expected to contribute to the risk corridor, a fund that was designed to provide financial assistance to money-losing insurers on the Obamacare exchanges. With the risk corridor only paying out about an eighth of what was requested by a number of insurers, quite a handful simply closed their doors, including more than half of Obamacare's healthcare cooperatives.
The fact that surveyed consumers' premium prices fell is an important reminder that Obamacare's influence remains comparably small compared to the employer-sponsored health insurance market. Private insurance exchanges and direct purchases also comprise market share of their own. In other words, the larger chunk of the health-benefits market appears to be working efficiently, even if Obamacare is having "hiccups."
The formula to keeping members happy
On top of declining premiums, J.D. Power listed the evolution of health plans into "wellness partners," and the utilization of integrated delivery systems (i.e., a network of healthcare and health insurance organizations that work cohesively as one organization) as the three "findings" that were pushing member satisfaction higher. Or, in simpler terms, the consumer wants to feel as if their insurer and physician network are operating seamlessly, that they're getting good value for their plan, and that their insurer genuinely cares about their well-being.
Which insurers scored highest? The truth is that it depends on the region. Some health insurers that outpaced the competition in one state or region brought up the caboose in others. There were, however, some consistent performers that stood out.
Kaiser Foundation Health Plan ranked as the highest-scoring plan in five of the 18 regions/states surveyed, which is pretty impressive. The reason for high levels of customer satisfaction likely stems from Kaiser Foundation Health Plan being a non-profit organization. Customers probably feel pretty good knowing that their premiums are going to fund patient care and not being pocketed by bigwig executives.
Anthem, which runs Blue Cross Blue Shield plans for profit in 14 states and operates as a private entity in the remaining states finished in the middle of the pack or toward the bottom in many instances. The same can be said of UnitedHealth Group's UnitedHealthcare, which took last place in more than one instance.
It's probably not surprising that UnitedHealthcare finds itself struggling to keep its members happy given its troubles on Obamacare's marketplace exchanges. The company warned its investors that it could lose nearly $1 billion, cumulatively, between 2015 and 2016 on its Obamacare plans. UnitedHealth Group blamed higher medical use rates and the ease of consumers switching plans as the reason for its steep losses, and cautioned that it could exit Obamacare's exchanges by as soon as 2017. Being openly disgruntled with Obamacare may not be helping its image.
Anthem is a bit tougher to figure out. It's been having solid success in states like California and New York, and it's been a big benefactor of Medicaid expansion, which has occurred in 31 total states. It's possible that Anthem's size is its biggest downfall. As a for-profit organization (in 14 states), consumers may simply feel that they aren't getting a good value or smooth integration of healthcare services.
If this report shows us anything, it's that we may want to keep a close eye on UnitedHealth and Anthem, which could both potentially lose market share to private and non-profit plans if consumers remain consistently less satisfied.