The health insurance problem nobody's talking about

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Jennifer FitzgeraldPresident and co-founderJennifer Fitzgerald is the President and co-founder of Policygenius, a leading provider of financial protection.

Published|5 min read

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Even if you’ve actively avoided the news over the past few months, you’ve probably heard something about the state of healthcare and health insurance in America. You may have heard that premiums are rising and many carriers are exiting the Affordable Care Act (ACA) marketplace, which will force millions of consumers back to the marketplace. So this Open Enrollment season will be a turbulent one for consumers, who have a lot at stake in choosing the best health insurance plan for them. And that points to the big problem in health insurance that doesn’t get a lot of attention: consumers don’t understand health insurance and aren’t confident in their ability to select the best plan for them.

How do we know?Well first, we’ve been engaging insurance consumers for years at PolicyGenius. Our digital platform has been used by millions of consumers for insurance advice, quoting, decision support and enrollment for products like life and disability insurance. We know that people put off insurance decisions, dreading them more than root canals, and commonly feel apprehensive and overwhelmed about the whole thing. During the first ACA open enrollment, we assisted consumers on the New York State of Health exchange to understand the pain points and critical junctures of the health insurance decision making process. And we found that many consumers were confused about where to start, and how the different features of a health insurance policy worked. To supplement those insights, we recently ran a nationwide survey of 2,000 US consumers, gauging their literacy, confidence and preferences around health insurance.And what we found was concerning, if not totally surprising to those of us who’ve been in the insurance business for a while. When it comes to health insurance, consumers generally don’t know what they don’t know. We asked consumers about four basic, and important, health insurance concepts: deductible, coinsurance, co-pay, and out-of-pocket maximum. Around 68% of consumers said they "definitely understand" the concepts. But then when we tested them on the concepts, asking them to pick the correct definition in a multiple-choice question, we saw much lower comprehension than the confidence would suggest. Only 4% of all consumers were able to correctly define all four terms. Consumers are most familiar with what a co-pay is: 53% were able to correctly define it. Consumers are least familiar with the concept of coinsurance: only 22% were able to correctly define it.

So what happens when you have consumers who don’t understand core health insurance concepts shopping for health insurance? Probably a lot of ill-informed decisions and frustration. And that’s why PolicyGenius is launching a health insurance app today, to help consumers confidently navigate the health insurance marketplace and the confusing set of decisions that entails. We’ve got 50-state coverage of both on-exchange and off-exchange plans. And, perhaps more importantly, we’ve designed an intuitive self-guided experience to lead users to the best health insurance plans for them.Our "light bulb" idea when designing this app, inspired by consumer insights from other lines of insurance we offer, is to remove the "black box." What does that mean? Well, other sites (including the newly revamped ask you questions, feed your answers into an algorithm, then spit out a recommendation of "Here’s the best plan for you!" But the universal response when we ran through those experiences, and tested them with consumers, was "Huh? How did they get that? Why is this the best plan for me?" And as anyone who’s worked in digital user experience knows, as soon as users question the workings behind your site, you’ve lost their trust.So we decided to flip the experience and walk users step by step through a deconstructed algorithm - that algorithm being the set of key tradeoffs involved in the health insurance selection process. That includes a guided, plain English walk-through of decisions about premiums, out-of-pocket costs, prescriptions, and provider networks. Every feature - whether it’s how much the plan’s premium is, to whether you want a plan that covers your current doctors - must be weighed against the tradeoffs in other features. This is the frustrating thing with health insurance: there’s no right answer, just a lot of "well, it depends" answers based on your priorities. For example, you might like to keep your current doctors, but would you still feel that way if the only plan that does so is twice as expensive as the next best plan? You might not - and that’s the "a-ha" moment that users find with our app, which illustrates the tradeoff when you make a choice, across all the key health insurance decisions. And the end result of the experience is transparently rank-ordered plans, by best fit for your priorities, with a comprehensive look at each plan’s benefits.

In our survey, only 39% of consumers said they’re "very confident" in their ability to select the right health plan for their needs. We’re hoping that our app gives consumers the confidence boost and the outcome they’re looking for.In addition to our app, we’ve launched a comprehensive resource center for health insurance, to help consumers educate themselves about important plan benefits during the shopping process. We’ve also built a subsidy eligibility calculator in our health insurance shopping app, as there are an an estimated 2.5 million consumers who may be missing out on health insurance subsidies for which they’re eligible. These subsidies are important because with them, about 70% of consumers will be able to find plans with a monthly premium of less than $75. So even with the bad news of premium hikes, affordability is still very much in reach for most consumers, as long as they’re informed.At PolicyGenius, our mission is to help people get the insurance coverage they need, and have them feel good about it. We’re excited to extend our mission to health insurance today. And while more Americans are insured than ever before, we’d like to help get that uninsured figure down to zero.

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