Thursday, February 28, 2013

Some States to Implement Insurance Ratings Early

Even though federal law doesn’t require states to rate insurance companies until 2016, some states are ahead of schedule. Starting this fall, insurance companies in states such as Oregon, Minnesota, and California will begin to see themselves rated on quality measures, according to Kaiser Health News. These ratings are designed both to help consumers make better-informed decisions, and to improve the health system overall by creating a mechanism where insurance companies can be rated higher for several plan benefits. These benefits may include incorporating more doctors, covering more procedures, and providing good customer service.

One issue that the states are running into, however, is confusion over what criteria to include in the ratings system. Hundreds of potential measures exist, but these measures must be adjusted to account for differences among plans enrollees. For example, a plan with great pre-natal benefits may be highly desirable to an expectant mother enrollee, but bad for a single male enrollee. Additionally, many quality measures may mistakenly rate the performance of hospitals or physician groups, not insurance companies.

To deal with those issues, Oregon boiled down over 2,000 measures into 13. The specific rating measures being used by the state include how an insurer performs on screening for breast cancer and diabetes, vaccinating adults for the flu, and providing needed care “without delay.” These ratings will then be displayed to Oregon consumers in a “star” system, where plans will receive one to four stars depending on the ratings. Some of the methodology included is being borrowed from Medicare, which currently rates private insurance plans that offer coverage to seniors and uses quality data to rate nursing homes, home health agencies, and dialysis providers.

Some opponents of the ratings argue that despite the cost and effort that states will invest to create the system and compile the data, the information will be overlooked by many consumers. Consumers Union, which published Consumer Reports Magazine, contends that while consumers say they want ratings information, they are much more likely to focus on overall plan cost, and whether or not their current doctor is included in the potential plan. Additionally, the ratings could be moot if all plans end up being rated the same.

States will begin to tackle this issue more in the coming years as they prepare for implementation in 2016. In the meantime, many are likely to be watching the results from the early states. 

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