Health insurers are asking lawmakers to make a new, lower-cost health care plan option available to individuals enrolled on the exchanges, but some benefit advisers say more options could mean more confusion for consumers and ultimately more work for brokers and agents.

America’s Health Insurance Plans, the national trade association representing insurance carriers, on June 11 proposed a series of “solutions” to improve the consumer experience with the exchanges, most notably the creation of a new lower-premium catastrophic plan option created as a tier just beneath the current lowest metal level, bronze.

AHIP says they believe a new catastrophic plan would further the public policy goal of affordability but benefit advisers tell EBA more plan offerings will only lead to more confusion — and a “paralysis of analysis.”

“Lawmakers should keep plans as simple and straightforward as possible,” says Richard Fahn, founder and president of the Northbrook, Ill.-based Excell Benefit Group. “The plans are often overwhelming to professionals, let alone consumers. Too many moving parts really frustrates and confuses everyone and leads to numerous administrative issues and problems.”

Adding a new tier level also means advisers would need to understand the intricacies of yet another plan option and, at the same time, help confused consumers differentiate between ever more plan choices, which is why Fahn says if AHIP’s proposal comes to fruition, advisers should be proactive and properly educate themselves, their clients and their prospects.

“The more knowledge an adviser has, the further they can assist their clients,” he says, adding that advisers can use technology to show plan comparisons and explain options, “mapping out the similarities and differences in plans, especially those hiding under the surface.”

With the Affordable Care Act, plans offered in the marketplaces fall into several metal-level categories based on their actuarial level standard, or the percentage of health care costs the policy would cover for a standard population. For example, platinum level plans have a 90% AV, while bronze level plans have a 60% AV. A limited number of individuals under the age of 30 also have the option to purchase a catastrophic, high-deductible plan, although it has an actuarial value that is comparable to the bronze plan.

AHIP is asking lawmakers to introduce legislation creating a new catastrophic plan option offering an AV just below the current minimum requirement. The plan would allow for lower premiums, but still include coverage of the ACA’s mandated essential health benefits, have no annual or lifetime benefit limits and cover all preventive health services with zero cost-sharing for consumers.

The plan “would allow individuals and families eligible for premium subsidies to use that financial assistance to purchase the new plan, an option currently unavailable to consumers purchasing the ACA catastrophic plan,” according to AHIP’s proposal.

The National Association of Health Underwriters says the proposal deserves to be considered and adds that “agents and brokers are the most effective tool individuals, families and business owners have to help understand the plan options that best fit their specific needs, and giving people more health insurance options is a key element of creating a vibrant marketplace.

But Fahn says, “Having additional catastrophic plans or lower cost options comes at a price,” including far more out-of-pocket responsibility for the insured.”

Provider assistance

Included in its proposed solutions released June 11, AHIP said it is also calling on providers to work with insurers to offer individuals on the exchanges better continuity of care and transparency.

AHIP says insurers support continuity of care as an individual undergoing a serious medical event, such as treatment for a serious or terminal illness or pregnancy, transitions from one plan to another. Health plans are also calling on providers to refrain from balance-billing consumers during transitions in coverage and to notify consumers of their network status and that out-of-network status will apply after the continuity of care period expires.

AHIP is also calling on providers to increase transparency for all individuals on the exchanges by notifying consumers of any out-of-network status that may apply and the price for their out-of-network care.

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