Topeka, Kan. – The Brookings Institution has released a report on six states—including Kansas—which evaluated the competitiveness of the health insurance marketplaces created by the Affordable Care Act (ACA). Kansas was chosen for the study because it managed to attract four insurance companies in 2014 to compete in the marketplace, even though it is a mostly rural state.
The Kansas Health Institute (KHI) conducted the field research for the Kansas portion of the study, which included interviewing stakeholders involved in the ACA marketplace in Kansas, including health care providers, health insurance agents and former insurance regulators. KHI is a member of a network of health policy and public management experts coordinated by the Rockefeller Institute of Government and the Brookings Institution to study the ongoing implementation of the ACA at the state level. A previous report by KHI described the early implementation process in Kansas.
The report was requested by the Office of the Assistant Secretary for Planning and Evaluation (ASPE) of the U.S. Department of Health and Human Services (HHS). The purpose of the study was to focus on states that had one or more potential indicators of “insufficient competition”—such as few insurers offering plans, low enrollment, high premiums, inadequately informed consumers or sparsely populated rural areas—and to understand how competition was working in these markets and what might make it work better.
Although the insurance markets vary among the six states (Alaska, Florida, Kansas, North Carolina, Ohio and Texas), some common themes emerged, including:
- Despite education and outreach efforts by insurance agents, navigators and health policy experts, many consumers lack a good understanding of health insurance and how plan provider networks and premiums are related to out-of-pocket costs such as deductibles, co-payments and co-insurance.
- The size of the population in a state’s insurance market is an important determinant of insurer participation.
- The ability of insurers to negotiate favorable contracts with health care providers is key to their success and interest in participating in an insurance market.
- Enrollment in marketplace plans is generally driven by low premiums, which has implications for consumers who purchase lower-cost plans that may not meet their health care or financial needs.
The report includes recommendations to improve competition, including:
- Encourage insurers to co-brand and risk-share with established health care provider systems as a way to obtain price concessions for their marketplace plans.
- Have navigator/assistor organizations provide culturally and linguistically sensitive, simple explanations of health insurance that also remind people of the need to have coverage to protect themselves and their families.
- Stress the emphasis on available subsidies and rising penalties.
- Provide larger fees or commissions for agents/brokers to motivate them to assist and enroll eligible participants through the marketplace.