Greater Insurer Competition Leads to More Satisfied Consumers


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.

More Employers Are Outsourcing Benefit Administration

One in three employers outsources all of their benefit administration, up 20% since 2013, according to a study by the Guardian. Employers are also using more vendors for support. Nearly two-thirds that outsource some benefit administration use multiple vendors, up from 48% in 2013. Employers of all sizes are realizing the need to improve efficiency; keep compliant with requirements of the ACA, FMLA, and ADA; and improve the enrollment experience. They will need to rely more on external expertise to meet their goals, according to the study.

Only half of employers say their company is very effective in tracking and managing employee leave, including FMLA, disability, and other paid-time off. Nearly two-thirds of employers outsource some aspects of the enrollment process, such as preparing enrollment materials (49%) and presenting at enrollment meetings (48%). Only 31% outsource the development of their enrollment strategy. Having a decentralized approach lessens the effectiveness of enrollment activities. It’s best to outsource enrollment strategies to integrate services that support employee decision-making, according to the study. Ray Marra, senior vice president, Group Products at Guardian said that outside expertise can help companies transform their benefit package with a broader range of employee benefits and related services. For more information, visit

More Hispanic-American children get health coverage

Fewer Hispanic children in the US lacked health insurance in 2014 than in 2013, with the uninsured rate falling nearly 2 percentage points to 9.7%, according to a report from Georgetown University and the National Council of La Raza. One factor in the improvement was opportunities for parents to obtain coverage through the Affordable Care Act, the report says. Kaiser Health News (1/15)

Voluntary Long-Term Disability Plans Are Getting More Popular

As employers move away from fully funding products, they are becoming more interested in voluntary long-term disability (VLTD) solutions to fill benefit gaps. In fact, the number of employers that fully fund LTD benefits has decreased from 51% in 2009 to only 24% in 2014, according to a 2014 Eastbridge study.
With this increased interest comes the demand for more flexible and innovative VLTD plans. Some innovations include higher maximums, new benefit options, more hybrid products, and plans that can meet the needs of not only the middle and large-employer market, but also smaller employers. In 2011, carriers added survivor benefits and cost-of-living adjustments. Since that time, carriers have also added optional benefits, such as employee-assistance programs, ADL increases, and financial counseling.

Although the majority of benefit options are chosen at the employer level, carriers are also looking at ways to offer more options at the employee level. These include more choices of benefit amounts, varying benefit durations, and the ability to buy less than the amount for which the employee is eligible.
More features and benefits offered by carriers, both at the employer and employee levels, have helped meet much of the increased demand for voluntary long-term disability coverage. Carriers should continue to look for ways to truly differentiate their product from others on the market, according to the report.

US Spends More on Health Care, But Has Worse Health

The United States spends more per-person on health care than do 12 other high-income nations. But the U.S. has the lowest life expectancy and some of the worst health outcomes, according to a Commonwealth Fund report. The study compares the U.S., Australia, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom.

The U.S. spent an average of $9,086 per person annually in 2013 and had an average life expectancy of 79 years. Switzerland, the second-highest-spending country, spent $6,325 per person and had a life expectancy of 83 years. Mortality rates for cancer are among the lowest in the U.S., but rates of chronic conditions, obesity, and infant mortality are higher than in the other countries. Most of the data predates the major insurance provisions of the Affordable Care Act.

Health care consumed 17% of the United States’ gross domestic product (GDP) in 2013, about 50% more than any in other country. Despite being the only country in the study without universal health care coverage, government spending on health care in the U.S.—mainly for Medicare and Medicaid—was high as well, at $4,197 per person in 2013. The U.K., where all residents are covered by the National Health Service, spends $2,802 per person.

Health care spending per-person is highest in the U.S. because of greater use of medical technology and higher health care prices. The study finds the following:

  • People in the U.S. visit doctors an average of four times per year; only residents of Switzerland, New Zealand, and Sweden have fewer visits. Americans also go to the hospital relatively infrequently, with 126 visits per every 1,000 people, compared to 252 visits in Germany, where the rate is highest.
  • Americans get the most diagnostic imaging exams, including MRIs, CT scans, and PET exams. The average U.S. adult also takes more prescription drugs than do adults in all the other countries except New Zealand.
  • Prescription drugs are most expensive in the U.S., with prices twice as high as in the U.K., Australia, and Canada.
  • Prices for health services are considerably higher in the U.S. On average, heart bypass surgery costs $75,345 in the U.S., compared to $15,742 in the Netherlands.

Rates of cancer deaths are lower in the U.S. than in most other nations—164 for every 100,000 people, compared to 220 in Denmark, 196 in the Netherlands, and 193 in the U.K. Cancer deaths in the U.S. also declined faster from 1995 to 2007 than in the other countries.

Health care spending growth slowed in the U.S. and globally. Per capita health care spending growth in the U.S. has slowed in recent years, from 2.5% in 2003 to 2009 to 1.5% in 2009 to 2013. This slowdown occurred in other countries as well, with spending growth even turning negative in Denmark and the U.K.

The U.S. spends the least on social services. The U.S. spends only 9% of GDP on social services like disability benefits or employment programs. It is the only country studied where health care spending accounts for a greater share of GDP than social services spending. In contrast, France and Sweden spent 21% of GDP on social services.

New health care models like accountable-care organizations, which base provider pay on patient outcomes, could encourage higher-quality, lower-cost care. These models could also help bring about a shift toward greater spending on social services, as health care organizations are incentivized to think more broadly about what their patients need to be healthy

Experts predict more private exchanges, more regulations in 2014

As employers with 50 or more full-time employees prepare for the Affordable Care Act’s mandate to take effect in 2015, more privately run insurance exchanges will offer benefits, and consumers will become more cost-conscious, predicts Alan Cohen, chief strategy officer for private exchange firm Liazon. Transparency around health care costs will improve, says Ceci Connolly, managing director of PricewaterhouseCoopers’ Health Research Institute. The Obama administration is likely to extend the March 31 deadline for getting insurance or paying a tax penalty, and it will promulgate more rules implementing the ACA, says Catamaran’s Ellen Nelson. USA Today (1/1)

Last Updated 01/19/2022

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