The number of people who don't have health insurance is at an all-time low because of the Affordable Care Act (ACA). The law has helped 20 million people get and keep health insurance.
But hearing that rates are going up very quickly makes some people wonder if they will be able to find a cheap marketplace plan when open enrollment starts on November 1. People who are shopping for health insurance on the marketplaces might have more and better choices than they think. This is why.
This is true for a few reasons.
All plans sold in the marketplace offer these and other important perks and protections under the Affordable Care Act to people who sign up:
Free services to keep people healthy, like cancer tests, check-ups, and birth control
A necessary set of benefits, like prescription drugs, maternity care, and mental health care, are covered. These benefits were not always covered before the ACA.
the chance for your kids to stay on your health plan until they turn 26
Protections against having to pay more for insurance because of your health or because you are a woman bans on dollar limits on benefits every year and for life
Insurance companies must spend a certain amount of your premium money on care and quality growth instead of running their businesses and making money. When insurers don't meet the standards, they owe you a check.
How people use insurance marketplaces
In the United States, people looking for individual health insurance plans have to sort through a maze of premiums, deductibles, copayments, and service networks. The Affordable Care Act made it easier to shop for health insurance by setting up markets for individuals. These marketplaces have health plans that are divided into metal tiers called bronze, silver, gold, and platinum. And studies have shown that people use these names to help them choose between plans.
Labels don't tell people everything they need to know, though. Instead, they show rising actuarial values, which are a way to measure how much of the medical bills the insurance company pays for. Silver plans have an actuarial value of 70%, gold plans have an actuarial value of 80%, and platinum plans have an actuarial value of 90%. Bronze plans have an actuarial value of 60%.
Most people who shop in the marketplace choose silver plans, which is usually a good choice. Even though they cost more each month, silver plans protect you more from out-of-pocket costs than bronze plans. People with low incomes can get extra help that lowers their deductibles, copayments, and coinsurance, but only if they buy a silver plan. These cuts in costs are known as cost sharing reductions, or CSRs.
We looked at what happened when some silver plans suddenly became a bad choice for customers in a new paper that came out in The Milbank Quarterly.
In 2017, the Trump Administration cut off government funding for CSRs, even though insurers were still required by law to offer them. 36 states, including California, reacted by "silver loading," which means adding the cost of these CSRs to the premiums of silver plans. Because of the higher price, premium rebates went up, which meant that people who were eligible could keep their silver plans without having to pay more each month.
Because rates for the silver plan are used to figure out all premium subsidies, silver-loading had another effect: all subsidies went up. That made plans in other metal levels cheaper for people who got help paying for them than they were the year before.
What would people do when these changes happen? We looked at how people moved between metal levels in Covered California, the state's marketplace, during open registration in earlier work. In the years before silver loading, about 4% of people who reenrolled each year changed their metal tier. In 2018, 7.2% of people who did so did so after silver loading. People who switched plans went from 9.6% to 12.2% in the past years to nearly 37% this year.
It was called the "Gold Rush," and a lot of people got better service without having to pay more for it. But, as our most recent study shows, not everyone did this.
Two insurers sold silver plans through Covered California for the first time in 2018. These plans had higher out-of-pocket costs and fees than their gold plans. This means that anyone who bought insurance from one of these companies and made more than 200% of the government poverty level (that's $50,200 a year for a family of four in 2018) should have gone for the gold.
Still, 20% of people who signed up for plans from these insurance companies picked the silver plan. Because of this choice, their rates went up by an average of $460 over the course of the year, and their deductible went up by $2,500 for an individual and $5,000 for a family.
If you stick with a plan that costs more but gives less, it could lead to more problems. People might not get care because of things like higher out-of-pocket prices. They might become less happy with their coverage, which could make them decide to cancel their policy. Because of this, regulators and policymakers need to look into ways to stop people from picking less-than-perfect coverage.
For example, automatic reenrollment is a key way to make having a policy easier and make sure people are covered. But marketplaces across the country could use smarter automatic reenrollment logic that puts people who reenroll in better coverage instead of just renewing their old plans. During the time period we looked at, this would have meant that the 42.8% of families in the two insurers' less-than-ideal silver plans that renewed their coverage automatically would have been moved to the same insurer's better gold plan.
Marketplaces could also change how their websites' choices are laid out to help people who are actively enrolling avoid making bad choices. One idea is to automatically remove plans that aren't as good for shoppers who are looking at their choices. This kind of fix has been put in place in Connecticut's market. At first, consumers who might be qualified are only shown the silver plans that offer the highest premium subsidies and cash back rebates. People can take this filter off if they want to, but the shopping process starts by showing them their best choices.
Another, maybe less annoying option would be to put the worst options at the end of the list. People could still scroll down and find these less-than-ideal plans, but they would be less likely to pick them.
Another approach is to use alerts or pop-up screens to let people know when they are making decisions that aren't the best ones. This method has been used before in Connecticut. When combined with their auto-filtering, the state saw a 56% drop (PDF) in the number of new users who had less-than-perfect coverage after the change was made.
It's important to note that none of these moves would need any extra help from Congress. The Centers for Medicare & Medicaid Services and state marketplace officials have the power to do what needs to be done.
The arrival of health insurance marketplaces has made shopping better for 12 million people in the individual market. There is still more that can be done to assist them in picking the service that best meets their needs.
People in every state can use the Health Insurance MarketplaceTM to look for cheap health insurance plans. A Marketplace for each state was set up in some states.
The other states work in the Marketplace, which is run by the federal government. Customers can get help in person when they apply for coverage in the Marketplace, including information on qualified health plans and programs that make insurance more affordable, such as Medicaid, CHIP, and premium tax credits. This is true no matter what state they live in.
People and groups can help people by becoming qualified application counselors or navigators. In addition, agents and brokers can help people sign up for Marketplace choices.
Here is a list of what each of these types of consumer help does, what training is needed, and how much money is needed.
What are some of the different consumer assistance roles?
Navigators:
Navigators are very important because they help people fill out forms to see if they are eligible for coverage through the Marketplace. When navigators help people find out if they qualify for programs that make insurance more affordable, they have to give them fair and unbiased information. If they do, they have to help them choose a plan and join.
Navigators also reach out to consumers and teach them about the Marketplace. They also tell consumers who have problems, questions, or issues about their coverage to talk to health insurance ombudsmen, other consumer assistance programs, or state agencies.
In all kinds of markets, you need navigators. They are licensed and get money from funds through the Marketplace where they work. Navigators need to get a lot of training and follow any other state rules that apply, like privacy and security rules. They also need to make sure they don't have any conflicts of interest and follow any other state rules that apply.
Certified application counselors:
These people do a lot of the same things that navigators do, like teaching people about the Marketplace and helping them fill out an application for coverage and insurance affordability programs. They also help with other enrollment and application processes.
The federal government runs the Marketplace, which lets groups certify application counselors. Community health centers and other health care providers, hospitals, and social service groups are all examples of these types of organizations.
A state-based Marketplace could decide to train application counselors itself instead of giving that job to outside groups. A state-based Marketplace can also list groups that are certified to help people with their applications.
The Marketplace does not give money to certified application counselors or groups that are designated by the Marketplace to be certified application counselors. But certified application counselors and groups in all marketplaces can apply for government money through Medicaid or other grant programs to help pay for their work helping people apply and enroll.
All certified application advisers have to go through a lot of training, which includes standards for privacy and security, and meet other requirements for their certification, such as telling the board about any possible conflicts of interest.
Agents and Brokers:
Agents and brokers who are licensed by the state can help people apply for coverage and programs that make insurance more affordable through the Marketplace. Agents and brokers are very important when it comes to teaching people about the Marketplace, both during Open Enrollment and the covering year.
If agents and brokers want to help people in the nationally facilitated Marketplace, they have to go through the training and registration process every year. Health insurance companies usually pay brokers and managers to help people sign up for qualified health plans through the Marketplace. This is how their contracts work. In many places, agents and brokers are required to look out for the best interests of their clients.
The first time most of us deal with insurance is when we buy car insurance to meet state rules or a lender's requirements. But getting a lot of different types of insurance is a must for anyone who wants to be financially stable.
We at Appetite Fyndr know that insurance is more than just another thing to do on a list. It's an important part of a good financial plan. As our goal, we help people discover the best deals on car and home insurance.
To use Appetite Fyndr, users must fill out a short form. Then, they can get real quotes quickly and privately. We get you accurate results without sharing your information because we use our own AI technology. It will give you access to the best and cheapest quotes for home and car insurance.
Insurance keeps you from losing money. Your home is one of your most important investments. If you don't have insurance, you could lose it in a storm or small kitchen fire. Your whole life savings could be lost in an instant if you are found to be at fault for a car crash and don't have insurance.
Risks are a part of life, but no one likes to think about them. With insurance, you can protect yourself, your assets, and the people you care about.
To put it simply, you should cover your most important assets—things that could ruin your finances or cause a big setback. Plus any personal debt that comes with that item. In this case, you should think about rules for:
When you buy car or home insurance, you're also buying risk insurance for yourself. In the event that you hurt someone or damage their property, your car insurance will protect you. Your home insurance will protect you from some lawsuits and help if someone gets hurt on your land.
When you make a claim, your insurance company will only pay up to the policy coverage limits. You have to pay the difference if the claim costs more than the limit.
The service limits aren't the same for everyone, which is a shame. This tells you how much you need:
Let’s look at these more in depth.
The type of insurance you buy will tell you how much security you need. Here's a quick rundown of what different types of policies will cover and how to figure out your coverage limits.
With car insurance, you protect both your car and your own responsibility. Damage and loss coverage might not be necessary if your car is worth less than $5,000. But for most drivers, getting more liability insurance is the right thing to do.
When you think about how much medical bills and cars cost, it's clear that $50,000 in medical coverage and $25,000 in property coverage can run out very quickly. Usually, it costs a little more to set higher liability limits than smaller ones. That is a very low price for service that is useful.
When it comes to house insurance, most people get it wrong when they set the limits of coverage based on the home's market value instead of how much it would cost to rebuild. Damage to your house means you have to pay to rebuild it. Never change the amount of coverage you have based on this cost.
To protect yourself from risk, you should always find out how much it costs to raise your limits. It's easy for lawsuits and hospital bills to get out of hand, and higher personal liability costs are often only a few dollars a month.
It's really hard to figure out how much risk you're exposed to. In fact, people are really bad at it. That doesn't mean you can't guess or talk to a professional on the subject.
You should keep yourself safe from dangers that are likely to hurt you. Like:
Standard policy types may still leave some people with weak spots in their insurance plan. Add extra coverages, like umbrella plans or supplemental insurance, to fill in the gaps.
Lastly, you should think about how much risk you are willing to take. This is not the same as not getting insurance even though you know you need it. Not having insurance or not having enough insurance is never a good idea.
But some people will have to decide at some point whether to get accident or comprehensive coverage for an old car. For some people, the extra cost of security is worth it because it gives them cover. For some, it's better to save extra money in case of a disaster and use it to buy a new car.
This kind of choice depends on how willing you are to take risks and how much money you have saved up for emergencies.
We can't go over all of the ways to lower your insurance costs in this short post. However, here is a broad look:
It might not sound fun to compare prices, but don't put it off. One of the easier ways to save money on insurance is to use a tool like Appetite Fyndr (which we hope you'll do!). It saves you time when you need to save money.
Customization of Insurance Policies on Marketplaces
The days when people watched whatever was on TV or bought whatever was on display at a neighborhood store are over. Today, big brands like Amazon and Netflix have made the world of tailoring very real for consumers.
People use personalized messages, deals, and prices to get in touch with customers at the best times and give them the best product or service for their specific needs. Before computers, marketers didn't have a lot of information about their customers and didn't have easy access to them. This made personalization nearly difficult. They had no choice but to depend on campaigns and messages that were vague and came and went.
Companies in a lot of different industries can now use customer data, analysis tools, and marketing technology to make campaigns, cross-selling, and prices fit the needs and wants of each individual customer. Personalized price and marketing aren't as well developed in the insurance business as they are in other fields, but they offer a huge chance to change insurance to meet the needs of the future.
In the insurance business, personalization is key to meeting customer needs. People are used to online stores and entertainment companies customizing their services based on their likes, dislikes, and habits, so they expect the same from their insurance companies.
Personalization also helps marketing work better. McKinsey says that personalized marketing has been shown to increase sales and customer satisfaction by 5 to 10 percent in a number of different businesses. It can give insurers an edge over their rivals in the insurance business, which changes quickly.
Personalization also makes customers more loyal and increases their total value. For every time an insurer talks to a customer, they collect more information that they can use to make future interactions and products more useful for that customer. A recent study found that 78% of customers are more likely to buy from a company again if it personalizes its products. This type of personalization loop is clearly useful.
Personalization can also help insurers lower risks and losses by making it easier to find and evaluate risks. By looking at information about customer behavior, demographics, and other important factors, insurers can create more accurate risk profiles and pricing models. This can help with more accurate underwriting and faster claims handling. Customers are interested in these models. An Accenture study from 2021 found that 69% of consumers would share a lot of information about their health, exercise, and driving habits in return for lower insurance rates. This is 19% more than in 2019.
Personalization can only happen with correct and high-quality info. Traditional ways of collecting data can take a long time, make mistakes, and not give insurers the level of detail they need to make personalized plans.
It's more than just facts. When insurers take raw customer data and turn it into insights they can use to write policies for each person, they also need advanced analytics. Without the right technology, insurance companies can't properly look at each person's risk and make policies that fit their needs.
When it comes to collecting data, digital tools are more accurate and faster. Some benefits are:
You can make insurance plans more unique in a lot of ways, such as:
More and more people are getting "pay-as-you-drive" car insurance. While traditional models set auto insurance rates based on things like age and area, usage-based models change rates based on how much the customer actually uses the car. Another example is that a customer who doesn't drive very often will pay a lot less than one who does. Three quarters of customers (73%) say they are interested in this model in a recent poll.
Customers who exercise, eat well, and don't smoke are charged less for life insurance with this type of personalization than customers who live less healthily. A study by Bain and Company in 2023 found that 59% of customers around the world want life insurers to reward them for living a healthy life.
Insurers can figure out how dangerous certain properties are by using high-quality aerial images and computer vision. They can even tell customers what they can do to lower their dangers. Instead of being given a set insurance price, customers who do things to make their properties less risky can get lower rates.
After getting correct information about their customers, insurance companies can use cutting edge technologies like IoT, AI, and machine learning to make plans that are unique to each person. AI can help insurers write policies faster, correctly interpret risk factors, and give customers suggestions for coverage choices that fit their needs. It can also be used to look at customer data, find fraud, and guess how much future cases will cost.
It's not just AI. Telematic data from a car's sensors and Internet of Things (IoT) features can be used to correctly show usage and support pricing models that charge based on usage. In the same way, home health tracking devices can help with personalized life and health insurance plans.
Insurance companies have a lot of options when it comes to personalization, but it can be hard to know where to begin. If insurers want to get the most out of insurance personalization, here are some of the first things they should do.
Digital data collection is essential for personalization because it lets you get correct and up-to-date information about your customers. Because of this, insurance companies should make digital data collection a top priority.
It's not enough to just collect the info. To process the data and give insurers useful insights that help them better understand their customers' needs and preferences and make policies that fit those needs, they need advanced analytics tools. Insurance companies should spend money on robust analytics because they help them get the most out of the data they have.
Personal information about insurance customers, like their health and financial situations, is kept secret. As time goes on, cybercriminals get smarter and use new attack vectors and tactics to steal that kind of information. As a result, insurers must put data security and privacy at the top of their list of priorities as they collect and study more customer data. This is to keep customers' trust and to follow the increasingly strict rules in the industry.
Automation and no-code tools can help insurance companies run more efficiently and give customers a better experience.
Personalized service isn't just "nice to have" these days; it's really the only way for insurance companies to meet customer needs and stay competitive. Insurance companies can stay ahead of the curve in a market that is becoming more competitive by using digital data collection to offer personalized plans that meet customer needs.
