State-based marketplaces were overall quite successful in retaining enrollees, however, a large number of consumers shopping within the marketplace during 2015 open enrollment decided to switch plans based on the price of services offered.
According to an analysis by Georgetown University, sponsored by the Robert Wood Johnson Foundation and the Urban Institute, two-thirds of 2014 enrollees were retained in six state-based marketplaces: California, Colorado, Kentucky, Maryland, Rhode Island and Washington.
Despite automatic renewals in some of the states, the study found enrollees engaged in a much higher rate of plan or insurer switching compared to other health insurance contexts. For example, in the federally-facilitated marketplace, 29% of enrollees eligible for automatic renewal switched plans. In Rhode Island, 62% changed plans, including 39% switching to a new insurer.
The largest 2014 insurer in Rhode Island, Blue Cross and Blue Shield of Rhode Island, saw a 49% decrease in market share compared to 2015 open enrollment, with most of the gain going to Neighborhood Health Plan of Rhode Island, which offered lower premiums than it did in 2014.
The changes were more modest in other states analyzed: 2% in California, 12% in Colorado, 10% in Kentucky, 15% in Maryland and 4% in Washington, according to the report.
There is no perfect way to manage re-enrollment in this market, since any kind of default creates a bias of one type or other, says Katherine Hempstead, a director at the Robert Wood Johnson Foundation. This study suggests that retention and shopping were not particularly sensitive to re-enrollment defaults, which is comforting. It seems like instead these processes are driven by the value consumers placed on keeping their coverage, which seems to be generally pretty high, and the attractiveness of the new products on the market, which probably varied considerably by state.
Overall the state-based marketplaces were fairly successful and had a smooth renewal process, the report says. Despite that, challenges were evident, including information technology. Technical glitches caused a lot of headaches for some enrollees, the report says.
Among the issues were eligibility systems had difficultly verifying enrollment income, causing delays in premium tax credit redeterminations. In Washington, a glitch caused 6,000 enrollees to have their coverage cancelled.
Respondents to the study also reported language was confusing in renewal notices from insurers and marketplaces. Insurers attribute this to regulatory requirements. The notices were required to go out before open enrollment and before insurers knew the price of the 2015 benchmark plan, resulting in premium tax credit information not being adjusted. In the report, marketplace officials in all state-based exchanges say they are continuing to work with insurers to simplify the notice language and coordinate timing and messaging.
Looking toward open enrollment 2016, Hempstead expects continued high retention but less shopping as the market matures and it appears that there will be fewer new carriers entering.
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