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17% of Consumers with Private Insurance Switched Plans in 1996-1997
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ASHINGTON, D.C. One out of six consumers with private coverage changed health plans over a one year period, with 68 percent of those changes due to either employers changing plan offerings or individuals switching jobs, according to a new study from the Center for Studying Health System Change (HSC). The study, based on HSCs 1996-97 household survey and published in the May/June issue of Health Affairs, found that only 24 percent of consumers changed to their current plan because it is less costly or offers better services, higher quality, preferred doctors or more convenient locations.
In addition, the study showed that almost a quarter of those who switched plans also changed their usual source of care, whether that be a regular physician, nurse or other health professional or specific place other than a hospital emergency room. The rate of provider switching was somewhat higher about 30 percent for those switching between two HMO plans or into and out of an HMO.
"Many consumers do not have plan choice. Most who change plans, are not acting out their preferences in the marketplace by shifting to plans that better meet their needs in terms of costs or quality," said Peter J. Cunningham, Ph.D., HSC senior health researcher and study author. "On the other hand, the large majority of people who switch plans are not having to change their providers so continuity of care can be maintained."
Of the 17 percent of consumers who switched plans, about one fourth switched from a non-HMO plan to an HMO plan, and over 10 percent moved from an HMO to a non-HMO plan. Persons switching to an HMO were more likely than others who changed plans to cite costs as the reason why. Those who disenrolled from HMOs were no more likely than other plan changers to identify a desire for better services as the reason for their switch.
The HSC study concludes that while most plan switching is driven by reasons that do not include personal preference, consumer choice does appear to be playing a somewhat larger than expected role in consumer decisions to switch to an HMO. This may reflect, in part, the fact that consumers cannot afford other options, although low-income persons were no more likely to switch to an HMO than higher income persons. Overall, this suggests that lower costs are something that consumers at all income levels value quite broadly.
Finally, the study showed that the near elderly (ages 55-64), blacks, Hispanics, and persons in fair or poor health were less likely than others to change health plans. This was also true for persons with lower incomes or less education. When such persons did switch plans, they were more likely to move into HMOs. These results suggest that HMO favorable selection practices, to the extent that they exist, are not necessarily a barrier to all people with serious health problems.
The Center for Studying Health System Change an independent research organization funded exclusively by The Robert Wood Johnson Foundation provides objective, timely analyses about changes in the nations health care system and their impact on consumers to private and public decision makers. HSC, based in Washington, D.C., is affiliated with Mathematica Policy Research, Inc.