Educating Customers about Health Insurance
Clinical Performance
Healthcare reform hopes to cover 30 million Americans who lack insurance. With the introduction of health insurance exchanges, retail pharmacies can play an important role in educating and enrolling your existing and prospective patients.
What has been talked about for several years is about to start becoming a reality. Effective October 1, 2013, health insurance exchanges will launch, providing individuals and small businesses, many of whom have previously lacked insurance, the ability to obtain coverage, with many individuals being eligible for subsidies. The concept sounds simple; the reality is far from it.
Background
A main objective of the Affordable Care Act (ACA)1 is to extend affordable insurance coverage to the uninsured and make insurance coverage more affordable for families and small business owners.
The way in which individuals and small business owners will be able to obtain coverage is through health insurance exchanges (also called marketplaces), which will be run at the state level. The idea is that these exchanges will “pool together millions of individuals and small businesses and their employees to increase purchasing power and competition in the insurance market, a luxury that only large employers currently enjoy.”2
These marketplaces or exchanges are designed to be a new one-stop shop where people who don’t have health insurance through an employer can enroll in a comprehensive health plan. Americans with an income of up to 400% over the Federal Poverty Line (roughly $43,320 for an individual or $88,200 for a family of four) may be eligible for tax credits when they purchase coverage through a health insurance exchange. Small businesses with 100 workers or fewer can also buy health insurance on these exchanges.
Exchanges are expected to begin operating on October 1, 2013, and coverage obtained through exchanges will begin on January 1, 2014.
Essential benefits
ACA establishes a minimum set of services that are the same in every state. These “essential health benefits” provide basic coverage across 10 different categories — including emergency care, pediatric care, prescription drugs, etc. All plans have certain protections, like upper spending limits for patients before their insurance company starts paying for their care. Additionally, to make it easier to compare plans, every marketplace will use the same four levels of coverage — from platinum (the most) to bronze (the least) — according to the level of benefits the plans offer. There’s also a special plan for young adults.
State-by-state differences
While the ACA mandates that exchanges are to be established and operated at the state level, each state has some control in shaping health reform for its residents. Each state can choose to:
- Create and operate its own exchange;
- Partner with other state exchanges; or
- Opt not to create an exchange and instead have the federal government create an exchange for them.
As of July 2013, The Commonwealth Fund reported the following breakdown:
- 16 states and the District of Columbia have declared state-based exchanges
- 7 states plan to pursue partnership exchanges
- 1 state is running a small-business marketplace, but defaulting to the federal exchange for individuals
- 7 states are utilizing the federal exchange, but conducting plan management themselves
- 19 states are utilizing the federal exchange
Interactive maps like the one above from The Commonwealth Fund and The Kaiser Family Foundation provide details about the plans in each state.
States that set up their own exchanges/marketplaces have a lot of control over what to include in their health coverage3
The federal government leaves it up to each state to determine exactly what the minimum services are for that state, meaning that each state can have its own essential health benefits. For example, some plans may pay for weight loss surgery or fertility treatment, but others may not. One plan may only cover a few drugs for a condition — like medicine for hypertension — while another plan may cover many brands. States can also decide what complementary and alternative treatments count as essential benefits. For instance, some states — like Maryland, New Mexico and Washington — are including acupuncture as an essential health benefit.
States can choose insurance companies and can set tougher rules for coverage than the federal guidelines require. For example, some states, like California, are limiting the number of insurance companies selling on their marketplace. They hope it will improve the quality of the plans offered. Other states, like Colorado, will allow any insurance company to sell plans.
Differences at the state level also include the structure of the marketplace (operated by the state, by a quasi-governmental entity, or as a non-profit), and the governance of the exchange/marketplace.
Two basic models have emerged:
- “Active purchaser” where a state actively purchases health insurance of behalf of consumers from a limited number of insurers. California and Massachusetts are among the states pursuing this model and setting up their own marketplaces.
- “Clearinghouse,” where a state serves as an information source to consumers who can compare information and prices among multiple competing plans, similar to Expedia.com.4
Confusion abounds
With all of the different aspects of ACA, and with so many state-by-state differences in obtaining coverage and subsidies, it comes as little surprise that confusion among consumers about health insurance exchanges is rampant. Consider the following statistics:
- 57% of Americans don’t understand how ACA will impact them5
- 42% either don’t believe that health insurance exchanges are part of ACA or don’t know6
- Only 62% of Americans are aware of subsidy assistance to help individuals purchase health insurance7
- 36% of those likely to get insurance through exchanges need more information to evaluate their options8
The director of a group in Texas that is working to reach uninsured families in the state said that Texans suffer from “a general lack of knowledge” about the law and that “folks just don’t have a lot of information about the exchanges and what their options will be.”9
The role of retail pharmacies
When people are confused, they are interested in assistance and guidance from a trusted, expert resource. Community pharmacies can help fill that role. A May 2013 survey (conducted on behalf of CVS) found that 68% of those surveyed say they expect retail pharmacies to offer information on health insurance options either in the store or online.10
Seeing the opportunity for pharmacies to address this void, some major pharmacy chains have announced plans to implement information and outreach programs, to hold in-store events, to distribute information, and possibly to invite government-trained navigators into their stores to educate customers on insurance plans.
The same opportunity exists for independent pharmacies. You can assist your current customers to strengthen your pharmacy’s role as a trusted resource, deepen relationships, and fill even more prescriptions for them. And, when you reach out to people in your community and provide them information on the exchanges, you’re likely to see them return to your pharmacy as a patient.
Helping customers with insurance questions: Resources for independent pharmacies
- Get educated. The insurance landscape is complex, but helping customers understand, in basic terms, what they need to do can provide great value. Take some time to understand the basics.
- Understand your state’s specific situation. The landscape and specifics are different in each state. Be able to explain to your customers how the exchange in your state works and exactly what customers need to do. Some resources to help explore state-specific marketplace activities are:
- Have information and resources. Learn from the chains by making information available to your customers in your store and on your website.
- CMS has an abundance of customer-friendly official publications and articles that you can pass along to your customers.
- CMS also has produced multimedia tools such as a public service announcement (PSA), videos and badges for your website. And, there’s a selection of materials for Spanish speakers and other languages like Korean, Vietnamese, Tagalog, Russian, and so on.
- You might also choose to create your own simple brochures that make it easy to direct your customers to the resources in your community and state. Start with nationally recognized sites, such as Healthcare.gov, to educate patients on healthcare exchanges.
- Be proactive. Don’t just wait for customers to ask you questions; instead, identify customers that are paying for prescriptions with cash and gently ask if they might be interested in knowing more about insurance options. Consider in-store events and publicize your ability to assist customers with basic insurance questions on your website, in a newsletter, in a direct mail piece or via an article in a local paper.
- Consider more formal options to get involved in educating current and prospective customers in your community:
- Become a “Champion for Coverage” to help let people know about these new healthcare benefits and get them enrolled .
- Evaluate whether to become a “Certified Application Counselor” organization, Navigator, or other option.
- Stay up to date. There are constantly changes in what is happening with health insurance exchanges. To be an expert resource for your community, you need to stay up to date on these changes. In addition to visiting the websites for your state board of pharmacy, state pharmacy association, and pharmacy news providers, bookmark the following:
- Download this Health Insurance Exchange Educational Resources one-pager to refer to later or pass on to your colleagues.