Emails, Letters Can Help Exchange Consumers Choose Better Plan

by Jane Anderson

California's individual health exchange successfully used inexpensive email and letters to encourage consumers to switch to lower-cost coverage that provided them with better benefits, according to new research. The 2019 program from Covered California potentially could be duplicated in other states to help consumers save on coverage, according to the study, which was published in Health Affairs.

During the 2019 open enrollment period for California's Affordable Care Act (ACA) marketplace, Covered California used a randomized intervention to see if low-income beneficiaries, particularly those who earn less than 200% of the federal poverty level, could be encouraged to enroll in silver plans with cost-sharing reduction (CSR) subsidies, which made more sense for them.

Consumers in this bracket are eligible for CSR, plans with lower premiums and out-of-pocket expenses, which increase the actuarial value of the base silver plan from 70% to as high as 94%, depending on income.

However, the Covered California marketplace does not automatically assign CSR-eligible consumers into enhanced silver tier plans, and an analysis conducted by the exchange found that nearly 20,000 consumers had chosen more costly gold and silver plans for the 2019 coverage year, even though they were eligible for an enhanced silver-level plan.

The study randomly assigned households to one of three groups: a control group that received no CSR-silver-specific messaging, an email-only group and a mail-plus-email group.

At the end of the study period, 17.7% of the control group had switched to enhanced silver plans. Relative to the control group, being assigned to the email-only group increased the enhanced silver enrollment rate by 2.0 percentage points for an 11% increase in plan switching relative to the control group. Being part of the mail-plus-email group increased the enhanced silver enrollment rate by 3.9 percentage points for a 22% increase in plan switching relative to the control group.

The results could be duplicated in other states, the researchers concluded. "Given that gold enrollment increased not just in California but nationwide after the termination of CSR subsidies, other states are likely grappling with how to guide low-income consumers to the best available plan for which they are eligible. Our intervention points to a low-cost approach for states that could yield reductions in choice errors."

From Health Plan Weekly