Greater Insurer Competition Leads to More Satisfied Consumers

SatisfiedCustomer

Health plan members are most satisfied when there is more competition among health plans, according to a J.D. Power study. The study rated satisfaction on a 1,000-point scale. The study rates satisfaction as follows:

  • Cost: 610 in competitive markets versus 606 in markets dominated by a single plan.
  • Customer service:743 in competitive markets versus markets 740 dominated by a single plan.
  • Information and communication: 646 in competitive markets versus 641 in markets dominated by a single plan.

When one carrier controls more than 50% of the market, member satisfaction is significantly lower when it comes to communication and customer service. Greg Hoeg of J.D. Power said, “Carriers are shifting toward member satisfaction as they face more legal restrictions on profitability. Having a choice of providers boosts member satisfaction in markets with less competition. “Sometimes, having fewer, simpler plan choices makes it easier for the member,” says Hoeg.

The ACA’s medical-loss ratio has forced health insurers to focus on increasing their market share to compensate for slimmer margins. Carriers are paying particular attention to cost management. One way to do that is to combine with other carriers, says Hoeg. Traditional plans are merging to reduce costs and increase market power. Examples are the merger of blue plans, national deals like Aetna/Humana, and Anthem/Cigna, and major market-driven acquisitions for UnitedHealthcare/Optum. Many have speculated that Anthem’s proposed acquisition of Cigna will harm competition and consumers by reducing the ability of other health insurers to compete with Blue plans.

Member satisfaction averages 688 in 2016, up from 679 in 2015, and 669 in 2014. Driving increased satisfaction are coverage and benefits (+12 points), information and communication (+11), and customer service (+10). Nationwide, member satisfaction has improved nine index points in 2016 at 688. This follows a 10-point improvement in 2015. Member satisfaction with health plans reached a low in 2014, following the introduction of the health insurance marketplace as part of the Affordable Care Act (ACA).

Health plans with integrated delivery systems are poised for success as health insurance focuses more on member satisfaction. An integrated system includes a hospital organization, a multi-specialty medical care delivery system, the capability of contracting for any other needed services, and a payer. Integrated plans have an average satisfaction score of 746, which is 63 points higher than that of non-integrated plans.

There has been a slight decrease in members’ monthly premiums. On average, the monthly premium for a family plan is $355 in 2016, down from $374 in 2015 while individual plan premiums are $207, down from $216.

Satisfaction is highest among health plan members in California (707), Michigan (699), Mid-Atlantic states (698); Illinois-Indiana (697), and Northwest states (692). Satisfaction is lowest among members in the Southwest (661) and Minnesota–Wisconsin (666) regions.

Last Updated 01/19/2022

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