Direct enrollment for ACA plans may lead to higher costs, fewer protections

Les Masterson

March 18, 2019

Dive Brief:

• Direct enrollment payers and brokers often don't guide people to plans that offer the benefits and protections found in Affordable Care Act plans, the Center on Budget and Policy Priorities said in a new report. The process of direct enrollment (DE) allows consumers to use non-marketplace websites to enroll in the exchanges and apply for ACA subsidies.
• Through DE, payers and brokers, which could have a financial incentive to sell non-compliant plans, can handle the entire application process. The Center on Budget and Policy Priorities found many issues with this setup, including that the DE process can lure more consumers away from the ACA marketplace, resulting in higher premiums in the exchanges.
• The report also noted that many DE entities offer non-compliant plans, including short-term options, side-by-side with ACA plans and Medicaid. That may make people think they provide the same level of protection. 

Dive Insight:

The ACA marketplace is supposed to be a one-stop shop for consumers to compare and find the right plan for them. Direct enrollment "stifles meaningful competition among marketplace plans," according to the report, and is an attempt to "privatize marketplace functions."

The DE program lacks consumer safeguards and includes misleading marketing and user experience tactics to usher shoppers to more profitable, yet skimpier, coverage, the authors argue.

In one example, a web broker lists what seems to be a complete list of plans in a rating area ("17 of 17") but covers only about a third of the available options. In others, websites like www.ValuePenguin.com, www.GetInsured.com and eHealth steered Medicaid-eligible people away from a single and streamlined application process or ignored their Medicaid eligibility altogether.

The Trump administration is looking to expand DE, "consistent with the Administration's larger effort to privatize more marketplace functions and reduce the resources, public presence, and capacity of the marketplaces themselves," according to the report.

This isn't the first complaint about how the administration is handling the ACA exchanges. Since President Donald Trump took office, ACA proponents have criticized the administration for weakening the health law. It has cut open enrollment periods, funding for navigators, marketing for ACA plans and cost-sharing reduction payments. The administration has also expanded short-term health plans and association health plans, which offer lower-cost alternatives that often fail to provide ACA protections, such as the 10 essential health benefits.

The House Committee on Energy and Commerce recently announced it's launching an investigation into short-term health plans. The committee will look into what the plans cover, as well as their business practices and advertising strategies. Democrats on the committee are asking for information from 12 companies, including major payers UnitedHealth Group and Anthem.

Having a short-term plan may mean lower premiums, but that comes with hefty out-of-pocket costs and limited protections. It could also lead to more medical debt and surprise billing, which is a major problem across many types of plans. A recent Kaiser Family Foundation report found that ACA plan payers denied 19% of claims submitted for in-network service. Fewer than 1% of those denials were appealed.

https://www.healthcaredive.com/news/direct-enrollment-for-aca-plans-may-lead-to-higher-costs-fewer-protections/550667/