One
looming problem for public exchange enrollment under the Patient Protection and
Affordable Care Act could be a (very) costly one to consumers.

A study from the
Columbia School of Business found that more than 80 percent of consumers
unknowingly will choose a higher cost health care plan than they need.

The
total bill for these mistakes? $9 billion.

“Consumers’
failure to identify the most appropriate plan has considerable consequences on
both their pocketbooks as well as the cost of the overall system,” said Eric
Johnson, co-author of the report and co-director of Columbia Business School’s
Center for Decision Sciences.

“If
consumers can’t identify the most cost-efficient plan for their needs, the
exchanges will fail to produce competitive pressures on health care providers
and bring down costs across the board, one of the main advantages of relying upon
choice and markets,” Johnson said.

Johnson
has advised several state health exchange systems on their designs and
structure.

To
get the estimate, researchers from the school used simulated exchanges modeled
on the design of the actual exchanges.

Researchers
found the average consumer stands to lose on average $611 — roughly half a
week’s salary for a family making $42,000 per year — by failing to choose the
most cost-effective option for their needs.

And,
because the federal government will subsidize many policies, American taxpayers
could pay an additional $9 billion for consumers’ mistakes in choosing more
costly plans.

But
Johnson and his colleagues identified several mechanisms that significantly
improved outcomes for the consumer, they said. And it’s a two-way street as
both consumers and exchange designers could improve the exchange experience.

They
suggested consumers “estimate first; peruse the plans second;” educate
themselves about the basics of health insurance and have a calculator on hand.

As
for the exchanges, researchers suggested exchanges limit the number of choices
in health care plans to avoid consumer confusion; include tutorial links and
pop-ups that explain basic health insurance terms; and include online tools for
the consumer including smart defaults, and cost calculators.  Don’t make a mistake – let us help you choose
a plan that fits your needs (one you enroll, you cannot change until next
year).  Call our certified ACA staff at
800-362-2809.