ACA exchanges, health insurers and public perceptions

It's safe to say that the election of a Republican president has generated a record level of uncertainty about the short-and long-term health of the Affordable Care Act. For insurers, bumps in the road ahead could easily turn out to be huge potholes, given the anything's-possible tone in Washington.

Even before the election, because of news headlines about sharply rising premiums for midlevel plans under the ACA, many consumers had a negative perception of insurers that had pulled out of ACA exchanges. According to a survey by my company, GfK, conducted shortly before the Nov. 1 open enrollment period, roughly one-third of consumers who purchased on ACA exchanges did not expect their present insurer to offer coverage on their exchange in 2017.

As a result, many respondents said they expected to be casting about for health care coverage alternatives both within and outside of the exchanges.

So it's a good time for insurance companies to stay on their toes and be prepared to better explain themselves when it comes to the sweeping health care reform legislation. The possibility that the longer-term battle over perception may not be going their way applies not only to those that have withdrawn, but those that have chosen to hang in there.

Back in September, when only speculation existed about the possible magnitude of ACA premium increases, consumers spoke loudly and clearly on the subject of insurers that had pulled out. Asked how they would feel if their insurance company stopped offering products through the ACA, 33 percent of adults with health insurance said it would worsen their view of the firm. More than half (57 percent) reported their feelings would be neutral, while just 8 percent said their view of the insurance company would improve.

What reasons did survey respondents give for insurers dropping out of exchanges? Asked to pick the most important, 36 percent of adults with health insurance cited "Insurance companies are putting profits before people." Of respondents with coverage under the ACA, 42 percent chose the same reason. Both percentages are twice as much as people who chose "Insurance companies are losing more money than they can afford to."

Now for the blame game. Just 30 percent of insured respondents placed the sole onus for exchange pullouts on insurers. That's the good news. But the largest proportion (42 percent) said the government and insurers bore equal responsibility. This does not bode well for either.

Insurers need employers — and agents

While the ACA has indeed expanded coverage, when you look underneath the headlines, it hasn't solved the problem of receiving care, as barriers driven by cost of seeking medical treatment remain. The most recent GfK survey of people insured through exchanges shows that 50 percent are cutting back on health care, with the most common action being cutting back on doctor visits when they are sick (36 percent). This is particularly prevalent among women (43 percent), who are also more likely to reduce lab testing. Among people on health exchanges earning less than $25,000 annually, 27 percent are frequenting urgent care/minute clinics in contrast to just 12 percent of all exchange purchasers, likely driven by both cost and convenience.

Moreover, despite the goal of "consumer directed care," a mere 6 percent of exchange customers have price shopped insurers while 24 percent have changed to a lower cost plan—absorbing the higher deductibles.

Insurers that fail to communicate their position on the ACA amid this kind of public sentiment risk their brand image. Most observers had expected insurers to reassess their offerings on the exchanges now and then. However, the outright defections we have seen have quickly limited consumers' choices—and eroded confidence that the ACA will find ways to meet their needs. Insurers still have opportunity to be clearer with consumers about how the ACA is affecting their bottom line, recognizing that some of their customers' skepticism may flow from a simple lack of understanding.

What should insurers do to move forward? While there is a simple path of getting messages out through, say, brand advertising, this may just raise cynicism, so it should be done with great care. A more nuanced path involves building advocates among other stakeholders.

For example, while the individual purchasers using the ACA marketplaces are one important audience, most people still buy through their employers. This gives insurers a strong channel to make their brand case through the employer group. Equip HR managers to accurately represent industry dynamics, and also provide information that helps members understand the cost drivers within the industry in general as part of the research and shopping process.

Similarly, agents and brokers are important touchpoints for individual and group purchasers alike, so ensuring they have the information they need to fairly represent the insurer point of view.

Finally, deliver excellence. If members, employers, brokers, and providers are all having quality experiences with an insurer, they're more likely to take your part. Consider all points of the journey, resisting the temptation to navel-gaze, and consciously design a system that people will want to be part of.

Liz Reyer is vice president, financial services, at GfK, a global research firm. She is based in the Minneapolis area and can be reached at [email protected].

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