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Amanda Starc and Daniel N. Mendelson on Year Two of the ACA

Enrollment began last weekend for Americans to get health insurance in 2015 through the federal HealthCare.gov and state marketplaces amid expectations of a smoother process and more transparency than in the first year. As the health insurance marketplace enters its second year, the focus is on helping consumers gain a better understanding of premiums pricing, deductibles and provider networks.

Consumers face higher premiums but could also see more insurers in their states and more competitive plan offerings. They are also adjusting to narrower network access for lower premiums which, in combination with incentives to doctors, promises to improve quality of care. Meanwhile, the politicization of the Affordable Care Act (ACA) means it faces continued assaults in a Republican-controlled Congress well into the 2016 presidential election season.

The No. 1 concern is premiums. This year, premiums will go up on average about 3%, said Wharton lecturer of health care management Daniel N. Mendelson, who is also CEO and founder of Avalere Health, a health care consulting services firm in Washington, D.C. While many consumers focus on premiums, it is important to take a more holistic view and look at not just premiums, but also at co-pays and network access, added Wharton professor of health care management Amanda Starc. They discussed the road ahead for the health insurance marketplace on the Knowledge@Wharton show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.)

Mendelson encouraged consumers to go out and shop because premiums in some plans will increase by much more than [the average of 3%]. Premiums on the most popular plans in the market are higher by 10% over those of last year, and that could mean hundreds of dollars for individuals, he added.

Consumers who are reluctant to shop around leave a lot of money on the table, said Starc. That is especially true for people who in the past have had coverage through an employer but now want to buy it on their own. A lot of times consumers can experience some sticker shock when they realize just how much health insurance costs, she added.

The ACA has stimulated rethinking on how clinicians are paid to make sure that incentives are aligned with the health outcomes that we want. Daniel Mendelson

Wiser in Year Two

Both insurers and consumers will be wiser after the first year of the health care marketplace, said Starc. She expected insurers to understand demand and costs better and to adjust premiums accordingly, including fixing mispricing, if any, from the first year. They may also pull out of some states and enter new states, she added.

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