In 2007, Massachusetts attempted to do something never achieved anywhere else in the United States. The state tried to make shopping for health insurance a simple - perhaps even pleasant - experience.
As part of its universal coverage plan, Massachusetts launched the Connector: An online portal where consumers could compare and purchase health insurance plans. The idea was to create something like an Expedia for health coverage, where an array of options would show up on one screen.
Purchasing health coverage turned out to be more complex than a plane ticket.
New research shows that more than 40 percent of shoppers found the information difficult to understand. One in five were overwhelmed with choices, and wished someone would help narrow their options.
The study, published last month in the journal Health Affairs, also found that those who reported a confusing shopping process had lower levels of satisfaction with their plan selection.
"In decisions where there are high stakes, people have more difficulty making good decisions," Anna Sinaiko, a Harvard research fellow, who lead the research.
Next year, 8 million Americans will turn on their computers and attempt to buy health insurance from a Web site like the one Massachusetts built. That prospect has health policy experts and behavioral economists rushing to figure out: How do they make a confusing, overwhelming process really, really easy?
"It's really hard," Ted vonGlahn says, a senior director at the Pacific Group on Business Health. In preparation for the Affordable Care Act, his group has run about 2,000 consumers through a hypothetical exchange Web site.
One of the biggest challenges grows out of the fact that buying health insurance is totally unlike most other purchases. A plane ticket or hotel room on Expedia comes with a price tag; the buyer knows it will cost $400, or however much, to fly to their final destination.
Health insurance is completely different. There are certainly the monthly premiums that a consumer will pay. But there are also deductibles and cost-sharing, which can significantly alter an insurance plan's out-of-pocket cost.
What exactly the costumer is purchasing is also a bit uncertain. Different plans have different networks of doctors and will cover various treatments and prescriptions at different levels.
With all those moving parts, consumers can easily make the wrong pick. VonGlahn's research has shown that, left to their own devices, consumers will place too much weight on the deductible - which could lead them to spend more on premiums than they need to, in order to avoid staring down that big, scary number.
"Because the deductible is hard to understand, you try and step back and make a comparison in your head of your costs," he says. "It's almost impossible for most people to distill that into Plan A will probably cost me X and Plan B will probably cost me Y."
For months now, vonGlahn has been part of an informal group of researchers attempting to figure out how exchanges can steer consumers towards the health plan that is the best, most cost-effective choice.
While insurance is complicated, it turns out consumers only want to know a few, simple facts about their insurance plan. Cost is important - not the premium or deductible, but rather what a consumer can expect to spend in a given plan year.
Customers usually want to know whether the doctor they already see is in their network. They also look for information how easy it will be to see providers: Will they need a referral, for example, to see a specialty doctor.
The key to a successful exchange, vonGlahn argues, is getting consumers that small amount of information they want in an easy to read fashion.
This would likely include some kind of a "cost calculator:" An algorithm that can tell a customer, given a few basic facts, what he or she can expect to spend on a given health plan. The calculator would not be foolproof; it could not account for a major catastrophe, for example.
What it could do though is give shoppers the same big, important number they use to purchase everything from cars to televisions: A price tag.
"We have to provide people with the cognitive shortcuts to get them to total estimated costs," Lynn Quincy, a senior policy analyst at Consumers' Union, says.
Others have advocated for allowing shoppers to filter health plans by doctor: This could cull down the list of potential plans, based on another factor that patients care about. This would, however, require greater cooperation from health plans than currently exists: No part of the federal law requires health plans to share their networks with the exchanges.
"To be successful, the states and federal government will need to be able to collect information that allows them to create these filters," says Sam Karp, vice president of programs at the California Healthcare Foundation. "To be successful, states are going to need to require health plans to provide some of this information."
Five years after its launch, the Massachusetts Connector is moving in a direction that looks pretty similar to what advocates hope for. They've added in a series of videos, such as the one below, that explains terms like "deductible" and "co-insurance."
Consumers can see, all at once, every single health plan that covers their primary-care doctor. Benefit packages have been standardized, meaning that consumers won't have to wonder which plan covers a certain treatment or prescription.
"As the first-in-the-nation public Exchange, the Health Connector has worked to continuously improve its consumer shopping experience," says Connector spokeswoman Stephanie Nichols.
As 49 states prepare to join Massachusetts, they will likely face a similar task.
KLIFF NOTES: Today’s top health policy reads from around the Web:
- This year's W-2 forms include the cost of your employer-sponsored insurance. Another day, another Affordable Care Act provision kicks in: This one requires employers, for the first time, to include the cost of their employees' coverage. The idea was to open workers' eyes to the actual cost of health coverage, which they rarely see. Robert Pear in the New York Times.
- States are rethinking the high risk pools. Temporary high risk pools now cover 300,000 Americans with some of the most costly medical conditions. With 2014 drawing near, some states are thinking twice about whether they should move those high-cost patients into the exchange all at once. Brett Norman in Politico.
- Fun with proposed rules, minimum essential coverage edition! The Obama administration has published a proposed rule on how they will determine who is, and who isn't, eligible for an exemption from the individual mandate. Department of Health and Human Services in the Federal Register.