Buying Insurance on Exchanges: It Helps to Have Help
Consumers' math skills a concern
The new Internet-based health insurance exchanges opened for business on Oct. 1 but stumbled out of the blocks. Computer problems and unanticipated levels of website traffic made it difficult, if not impossible, for many people to review their health-plan options in the first week or two of open enrollment under the Affordable Care Act. The law is the Obama administration's controversial effort to bring health-care coverage to an estimated 30 million uninsured Americans.
HealthCare.gov, the federally run website serving as the exchange in 36 states, continues to experience the greatest level of disruption.
Once consumers successfully log onto an exchange -- whether the federally operated exchange or the 14 state-operated exchanges plus Washington, D.C. -- the next challenge is sorting through the coverage options available to them under the health reform law, also known as "Obamacare."
Ellen Peters, a professor of psychology at Ohio State University, said choosing a health plan involves financial decisions that even people with health insurance don't have to make very often. For the uninsured, the choices "may be quite unfamiliar," she said.
Peters is the lead author of a July 2013 paper commissioned by the Institute of Medicine's Roundtable on Health Literacy that showed that only 8.6 percent of uninsured adults have proficient "numeracy skills." These are defined as the math skills needed to take full advantage of the online exchanges.
Most consumers can figure out the difference between two plans' monthly premiums. But people need a greater level of math proficiency to estimate total health-plan costs based on expected health-care needs, the report noted.
'They were practically throwing darts'
Studies demonstrate ways to simplify the task by presenting options to people in a way that will help them make better choices.
Eric Johnson, co-director of Columbia University Business School's Center for Decision Sciences, and Tom Baker, professor of law and health sciences at the University of Pennsylvania, realized some time ago that "choice architecture" would matter on the exchanges. To test their hypothesis, the two academics and colleagues in New York, Miami and Jerusalem set up several experiments mimicking the decisions consumers have to make when shopping on the exchanges.