Why Do We Let People Pick The Wrong Health Plan?

I was reading some of the research by McKinsey this morning on the individual market enrollment and the overall exchange product benefit design.  It got me thinking about the issue where consumers choose the wrong plan design based on their personal utilization of healthcare.  Why do we let that happen?

I know some of you are thinking “let that happen”…we don’t do that.  Others who work in the industry may be thinking that consumers can make good decisions. 

But, we know that consumers don’t spend enough time evaluating their options.  We know that consumers are overwhelmed by all the information they get about healthcare.  We know that consumers don’t have access to all their data.  And, we know that consumers can’t understand all the healthcare mumbo-jumbo that we use to explain what we do. 

“The ACA deals with the problem of consumer misunderstanding by requiring insurance companies to publish standardized and simplified information about insurance plans, including what consumers would pay for four basic services,” noted lead author Loewenstein. “However, presenting simplified information about something that is inherently complex introduces a risk of ‘smoothing over’ real complexities. A better approach, in my view, would be to require insurance companies to offer truly simplified insurance products that consumers are capable of understanding.” (source of this study)

This study from a few months ago predicted that over half of consumers would choose the wrong plan thereby causing them to spend more money out-of-pocket annually for their healthcare.  Companies understand this.  There is an initiative called Putting Patients First which created a cost estimation tool – http://www.puttingpatientsfirst.net/.  This conceptually helps.

But, the reason I say “let” is because the healthcare companies all have our data.  They know our medical claims.  They know our pharmacy claims.  They have our lab values.  Everyone has predictive risk models now.  If that data could be downloaded to a Personal Health Record (PHR) and then used to model our costs under each of the benefit plan options, we could make an informed decision. 

And, no…this isn’t just a healthcare.gov issue.  Most employees have had access to multiple plan options at their employer for years.  Sometimes all under the same health plan and sometimes with multiple health plans.  I’ve talked about this for a long time.  This would be relatively simple for an IT team to build and deploy.  It could also be a huge catalyst for the PHR movement to get data into the hands of the consumers and give them a reason to do this.  If I knew I could save $500+ per year by tracking and using my data, that should be a great reason to take action.