How to Fix Annual Health Care Enrollments

Every fall, nearly everyone with health insurance must pick the coverage they want for the next calendar year. And every year since I’ve been writing about the subject, I see a flurry of stories about how people can make good choices but often do not.

On cue, health experts lament that open enrollments are so confusing that many people fail to make any decisions at all. Making no decision can be costly, however, as people often keep health plans that are less comprehensive and more expensive than others they could have chosen. It is a Groundhog Day to do justice to Bill Murray.

The culprits here are too much complexity and too much choice in coverage packages, particularly for the more than 60 million older and disabled persons with Medicare. The growth of private drug plans (Part D of Medicare) and Medicare Advantage (MA) plans have turned Medicare annual enrollment into a paralyzing ritual for many beneficiaries.

How can they evaluate dozens of different Part D and MA plans, each requiring several sophisticated assessments of their medication and health needs in a future not even the smartest health experts can know for certain? How well did anyone anticipate the pandemic when selecting 2020 health plans a year ago?

Confusion also attends Affordable Care Act enrollments. Here, the aggressive and persistent opposition to the ACA from the Trump Administration has done lasting damage. Funding for navigator programs to help guide people in ACA sign-ups has been sharply cut. As a result, per a New York Times piece last week, large numbers of people don’t believe the ACA even still exists, think its health plans are prohibitively expensive, and don’t understand how tax subsidies can make coverage affordable.

The U.S. Supreme Court heard open arguments last week about whether the entire ACA should be scrapped. Most experts who listened in on the justices’ discussion came away thinking it will survive.

If this is the case, one of the clear priorities for President-elect Joe Biden should be to greatly expand government-funded ACA communication and assistance programs.

This would be welcome, but why stop there? Why not also tackle the annual enrollment miseries inflicted on those with Medicare? And while we’re at it, how about helping the states do a better job of assisting upwards of 85 million adults and children who have or would like Medicaid?

Job losses from the pandemic have stripped employer health coverage from millions of people and their families, driving them to seek Medicaid and, at the same time, causing funding shortfalls in many states.

Contrast this complexity and confusion with private employer health insurance that covers more than 155 million people and their families. Even the largest employers limit employee plan choices to two or three. This can lead to some grousing about limited coverage choices, but most employers support solid private insurance plans and retaining employer coverage has become a major reason why people keep their jobs.

Helping people with government health insurance programs make more informed coverage decisions can and should be a priority of a new Democratic administration.

This is not rocket science. The State Health Insurance Assistance Program (SHIP) provides free Medicare counseling from volunteer-staffed offices in every state. Doubling SHIP funding would cost little more than $50 million – a rounding error for a program that costs taxpayers and enrollees than $700 billion a year. Funding more Medicaid counselors at the state level would be a relative bargain as well.

While we’re at it, Medicare itself does a mediocre job helping consumers navigate their health care choices. This doesn’t come across in the steady stream of self-congratulatory pronouncements that seem to be standard fare since 2017 at the Centers for Medicare & Medicaid Services (CMS).

Beyond greatly expanding its public-facing communications efforts (again, a funding bargain), serious thought should be given to developing standard packages of open enrollment choices similar to what employer 401(k) retirement plans began doing 15 years ago.

At the time, employees were being asked to make investment decisions that would challenge even Wall Street experts. By distilling choices into packages of professionally managed investment funds, participating employees found that less choice produced better investment outcomes.

Health care can be more complicated even than the world of stocks, bonds, and mutual funds. Creating standard packages of solid health coverage is an idea that merits serious study, and one that behavioral economics suggests is long overdue.