Broker Private Exchanges Still Fall Short of Government Exchanges
Government Exchanges Had More Obamacare Plans than eHealth in 7 of 11 Cities Investigated and More Medicare Advantage Plans than OneExchange in All 11 Cities
Health insurance exchanges, both government and private, are a rapidly growing source of health insurance for American consumers. Accenture predicted that by 2017 approximately 18% of the US population will buy health insurance through exchanges and by 2018 more people will enroll in plans through private exchanges than through government exchanges.1 The Affordable Care Act, also known as Obamacare, created an online health insurance marketplace for every state, either via the Federally-facilitated exchange or a state-run exchange. However, before the Affordable Care Act was implemented there were already popular online health insurance exchanges offered by health insurance brokers such as eHealth, which created the first broker-run health insurance exchange in the United States2 and Extend Health (now owned by Towers Watson and renamed OneExchange), which created the first broker-run Medicare exchange.3
In June 2013, HealthPocket compared the inventory of health plans on eHealth and Extend Health with the plan inventories of the government plan finders at Healthcare.gov and Medicare.gov.4 The study found that the number of Obamacare and Medicare plans with effective date June 1, 2013 that were displayed on private exchanges was significantly less than on government plan finders. Given the numerous changes in the health insurance market in 2014, HealthPocket performed a new study comparing government exchanges with the private broker health insurance exchanges. This investigation focused on the Obamacare health plan inventories across eleven geographically diverse major cities across the United States on eHealth (ehealthinsurance.com) as compared to each city’s government-run health insurance exchange.5 HealthPocket also compared the Medicare Advantage plan inventories across the same cities on Towers Watson’s OneExchange (medicare.OneExchange.com) and the Medicare Plan Finder on Medicare.gov (the government-run Medicare insurance exchange).6
Health Plan Inventories Among Obamacare Exchanges
The government exchanges had more Obamacare plans than eHealth in seven out of eleven cities; there were no ties in any city. On average eHealth had 29% fewer Obamacare plans than the government exchanges. The greatest disparity was in Miami where eHealth displayed 40 plans and Healthcare.gov displayed 137 plans. The exchange comparison study from June 2013 found on average that 38% of the plans displayed on Healthcare.gov were offered on eHealth.7
On average the lowest available premium was 6.5% higher on eHealth than on the government exchanges. In every city, the lowest available Obamacare monthly premium for a 40-year-old non-smoker, rounded up to a whole dollar amount, was at least as low on the government exchanges as it was on eHealth.8 The largest disparity by percentage was in Seattle, where the lowest available premium on eHealth was 21% higher than the lowest available premium on the Washington Healthplanfinder.
The government exchanges had more Obamacare plans with a $0 deductible than eHealth in eight out of eleven cities. In two cities the numbers were the same and in Chicago eHealth had a $0 deductible plan that was not on Healthcare.gov. On average eHealth displayed half as many $0 deductible Obamacare plans as the government exchanges. The greatest gap was in Phoenix where eHealth displayed 3 plans and Healthcare.gov displayed 19 plans with $0 deductibles.
Inventory of Medicare Exchanges
In all eleven cities, the government Medicare exchange displayed more Medicare Advantage plans than OneExchange. On average OneExchange displayed 65% as many Medicare Advantage plans as the government plan finder. This is an improvement compared to the results of the private exchange study from June 2013, which found that on average Extend Health displayed 30% of the Medicare Advantage plans available on the government plan finder.9
The Kaiser Family Foundation found that 84% of Medicare beneficiaries in 2014 had access to a Medicare Advantage plan with a drug component and a $0 premium.10 In all eleven cities, HealthPocket found that the government Medicare plan finder displayed more Medicare Advantage plans with $0 premiums than OneExchange. On average OneExchange displayed 58% as many Medicare Advantage plans with $0 premiums as the government plan finder.
Additionally the Kaiser Family Foundation determined that 95% of Medicare Advantage enrollees in individual plans chose a Medicare Advantage plan with drug coverage.11 HealthPocket found that in all eleven cities the government plan finder displayed more Medicare Advantage plans with drug coverage than OneExchange. On average OneExchange displayed 64% as many Medicare Advantage plans with drug coverage as the government plan finder.
HealthPocket also compared the availability of Medicare Advantage plans with CMS ratings of five stars12 on both Medicare.gov and OneExchange. Medicare.gov displayed at least one plan with five stars in six out of eleven cities. OneExchange displayed plans with five stars in only one city, Seattle. However both Medicare.gov and OneExchange displayed the same five plans with five star ratings in Seattle, so OneExchange displayed one third as many Medicare Advantage plans with five star ratings as Medicare.gov across the eleven cities. This is an improvement from the results in June 2013, when the earlier exchange study found that no five star plans were displayed on the broker exchanges.13 However it is important to note that Seattle was not included in the June 2013 study.
Although the government exchanges averaged a more comprehensive list of plans than the private broker exchanges, the results of this study show that the inventory of private exchanges has become more competitive than was the case for 2013. In particular OneExchange displayed on average 65% as many Medicare Advantage plans as the government plan finder, up from 30% in June 2013. The exchange on eHealth improved to have 71% as many Obamacare plans as the government exchanges. The previous study from June 2013 found that eHealth had only offered 38% of the plans displayed on the plan finder at Healthcare.gov.14
It is important to note that the federal exchange Healthcare.gov serving dozens of states has changed substantially since June 2013 when the first study had been performed. The main consumer comparison tool is now restricted to on- exchange health plans sold on the marketplace. The older version of the Healthcare.gov comparison tool can still be accessed at finder.healthcare.gov. This older version of the comparison tool still includes some off-exchange plans alongside the on-exchange health plans.15 HealthPocket compared the Obamacare plans on this exchange to those on eHealth and found that on average eHealth displayed 58% as many plans as finder.healthcare.gov. In nine out of eleven cities finder.healthcare.gov had more plans than eHealth, and there were no ties in any city.
Quotes for each city and exchange for plans with an effective date of June 1, 2014 were obtained on May 1, 2014. Quotes for Obamacare plans were found for a 40-year-old non-smoker with an annual income of $50,000.
Only plans displayed directly online to consumers were considered for this study. Any relevant plans that were displayed on the exchanges were included in the analysis, even if those plans could not be purchased through the exchange. Special needs plans were not included in the analysis of Medicare Advantage plans.
The following zip codes were used for each city when zip codes were required for a quote:
- Atlanta: 30325
- Chicago: 60633
- Dallas: 75260
- Detroit: 48227
- Houston: 77077
- Los Angeles: 90035
- Miami: 33133
- Philadelphia: 19129
- Phoenix: 85025
- San Francisco: 94125
- Seattle: 98119
The analysis for the cities in states using federally-facilitated marketplaces (Atlanta, Chicago, Dallas, Detroit, Houston, Miami, Philadelphia, and Phoenix) used Healthcare.gov for the government Obamacare exchange. Medicare.gov was used for the government-run Medicare insurance exchange. The analysis for the cities in states using their own marketplaces (Los Angeles, San Francisco, and Seattle) used Washington Healthplanfinder and Covered California for the government Obamacare exchanges.
This analysis was written by Jesse Geneson, Data Researcher at HealthPocket, and Kev Coleman, Head of Research and Data at HealthPocket, with data analysis by Katherine Bian. Correspondence regarding this study can be directed to Mr. Geneson at firstname.lastname@example.org.Jesse Geneson on Google+
Kev Coleman on Google+
1 Richard Birhanzel, Scott Brown, Joshua Tauber. “Are You Ready? Private Health Insurance Exchanges are Looming.” Accenture (2013) http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Are-You-Ready-Private-Health-Insurance-Exchanges-Are-Looming.pdf
2“New eHealth Index Report Highlights Off-Exchange Consumer Trends and Costs for First Obamacare Open Enrollment Period.” Wall Street Journal. (May 1, 2014) http://online.wsj.com/article/PR-CO-20140501-918164.html
3 Caroline Chen. “Employers Turn to Private Health Exchanges to Cut Costs.” Bloomberg. (February 19, 2014) http://www.bloomberg.com/news/2014-02-19/employers-turning-to-private-health-exchange-to-cut-costs.html
4 Steve Zaleznick. “Comparing Two Leading Private Online Exchanges to Government Plan Finders Shows Gaps.” HealthPocket.com (June 3, 2013) https://www.healthpocket.com/healthcare-research/infostat/comparing-two-leading-private-online-exchanges-to-government-plan-finders-shows-gaps
5 OneExchange was not included in the analysis of Obamacare plan finders because its Obamacare plans were only visible to users whose companies were registered for OneExchange, whereas all of the Obamacare plan finders that were included in the analysis were visible to all users. The government exchange in the analysis was either Healthcare.gov for cities in federally-facilitated marketplaces or the state exchange for cities in state-based marketplaces.
6 Medicare Advantage plans deliver the health insurance benefits of Medicare Parts A & B through a private insurance company and often provide additional benefits beyond what is found in Original Medicare. About 28% of Medicare beneficiaries were enrolled in Medicare Advantage plans in 2013. Marsha Gold, Gretchen Jacobson, Anthony Damico, Tricia Neuman. “Medicare Advantage 2013 Spotlight: Enrollment Market Update.” Kaiser Family Foundation. (June 2013) http://kaiserfamilyfoundation.files.wordpress.com/2013/06/8448.pdf
7 Zaleznick. HealthPocket.com (June 3, 2013)
8 Monthly premium costs on Healthcare.gov are rounded up to whole dollar amounts. For example a monthly premium of $153 on Healthcare.gov can represent an actual monthly premium between $152.01 and $153.
9 Zaleznick. HealthPocket.com (June 3, 2013)
10 Marsha Gold, Gretchen Jacobson, Anthony Damico, Tricia Neuman. “Medicare Advantage 2014 Spotlight: Plan Availability and Premiums.” Kaiser Family Foundation. (December 2013) http://kaiserfamilyfoundation.files.wordpress.com/2013/11/8520-medicare-advantage-2014-spotlight2.pdf
11 Gold, Jacobson, Damico, Neuman. Kaiser Family Foundation (June 2013)
12 The following link explains the CMS quality rating system for Medicare plans. http://www.medicare.gov/Pubs/pdf/11226.pdf
13 Zaleznick. HealthPocket.com (June 3, 2013)
15 Ibid. The Healthcare.gov plan finder in June 2013 displayed plans in every state and included all plans with at least 1% of a carrier’s enrollment by zip code region.