Consumer Rep: Exchanges Might Not Affect Plan Mobility

In Germany, a law that took effect in 2009 made premium cost differentials much more visible. That law doubled plan switching rates for 2010, Jost says.

Most of the time, however, enrollees resist changing plans, because changing plans means changing doctors or hospitals, Jost says.

Plan change rates tend to be 5% or lower for consumers using exchanges in Europe, and one study of Medicare Advantage enrollees found that their 2004 plan change rate was less than 5%, Jost says.

“Switching rates are higher for Medicare Part D drug plans, but this is largely an artifact of the auto-enrollment of low-income subsidy members, who are moved to a new plan when their current plan increases its premiums too much but then can themselves switch plans again if they do not like the plan in which they are autoenrolled,” Jost says. “Plan switching among enrollees who are not low-income-subsidy recipients is only about 6%. Plan switching in the FEHBP is also uncommon.”

Carriers participating in Massachusetts’ subsidized Commonwealth Care exchange program have plan switching rates of 2.5% to 7%, Jost says.

Even when consumers do change plans, they often change from one plan offered by a carrier to another plan offered by the same carrier, Jost adds.

In the first few years after PPACA took full effect, enrollment in individual and family options would grow rapidly, but experience suggests that risk pools would soon stabilize, and PPACA already includes temporary risk-adjustment feature that could help protect carriers against any short-term risk pool volatility, Jost says.

Jost notes that high first-year sales commissions can add to volatility by giving agents and brokers an incentive to get consumers who already have coverage to switch plans.

Because of concerns about health plan enrollee “churning,” Medicare limited first-year commissions to 200% of renewal-year commissions for both the Medicare Advantage and Medicare Part D prescription drug plan program in 2009, Jost says.