About 6 million members enrolled in their benefits on a private health insurance exchange for the 2015 plan year, continuing an adoption trend with more than 100 percent annual growth since 2013. The mid-size employer segment of 100 to 2,500 employees is driving initial growth, which is projected to double again in 2016 to 12 million employees (source: Accenture analysis). The promise of choice, cost savings and customer experience dominate the trend-lines on private exchanges but innovation really holds the key to sustained adoption and growth.

Fidelity Investments® today announced the launch of Fidelity Health MarketplaceSM, which offers one-stop access to integrated health, wellness and financial benefits to small and midsized businesses and their employees (source: Fidelity press release). Fidelity Health Marketplace offers employers the ability to choose from an extensive network of national and regional medical, dental, vision, and life benefits in addition to tax-savings options and access to wellness tools and programs. The Marketplace uses hCentive’s WebInsure™ Benefits private exchange technology platform, which offers an integrated enrollment experience and pre-configured connections to a network of insurance carriers and a range of health and other ancillary benefits.

Integrating financial solutions with health and wellness offerings through a private exchange delivers a real “health & wealth” proposition. More importantly, it exemplifies continuous product innovation and expansion with both insurance and non-insurance products to meet the unique and specific needs of employers and employees. For example, hCentive recently added a socially responsible credit program that offers low-cost employee loans with 0% financing. Previously, employees would not have had access to such a program with payroll deductions, but our private exchange solution easily allows them to bundle the product if they need to manage high or sudden medical costs.

Innovation, coupled with digital footprint, branded storefront and sophisticated decision support tools for employees will bolster brokerages and financial services firms’ ability to differentiate from established competitors and emerging tech upstarts; provide employees with intuitive user interface and experience to shop, select and enroll in benefits; and, simplify and standardize onboarding of carriers and benefits products. That is what will really drive demand for private exchange solutions from employers in 2016 and beyond. Tell us what you think.

Experience the new Fidelity Health Marketplace at https://www.fidelityhealthmarketplace.com/.

Learn about hCentive’s WebInsure Benefits platform at https://www.hcentive.com/products/benefits/. Contact us to see what hCentive can do for you!

The federal government became states’ technology vendor when it enticed four states to use HealthCare.gov by initially offering it for free, while underpricing HealthCare.gov compared to its actual costs for another 34 states.

Four states including Oregon and Nevada tried to stand up their own health insurance exchanges, hiring technology vendors that pushed for expensive custom builds with no proven track record for success. When those vendors failed to deliver functional exchange technology, the four states ditched their faulty software and began using HealthCare.gov – which at the time was offered to them free of charge. By offering HealthCare.gov to those states as a replacement technology solution, the federal government effectively became their technology vendor – enticing states to join with a two-year free trial period.

As the four states used HealthCare.gov at no cost, another 34 states paid federal technology use fees that were intentionally underpriced compared to HealthCare.gov’s actual costs. The federal government intends to continue underpricing HealthCare.gov in these 34 states through December 2017 – even though the Affordable Care Act required all exchanges to be self-sustaining by January 2015. As long as HealthCare.gov continues to be underpricing its services compared to their actual costs, states can’t benefit from private sector vendors who can compete favorably with HealthCare.gov to provide states better functionality and a pricing structure that encourages enrollment success. But this situation is changing in four states.

States faced with HealthCare.gov’s actual costs are given a fair opportunity to consider financially sustainable alternatives for their state marketplaces.

In November 2015, the federal government announced that HealthCare.gov intends to charge new federal technology use fees in Oregon, Nevada, New Mexico and Hawaii that are “reflective of [HealthCare.gov’s] actual costs.” Faced with the full costs of using the federal exchange, Oregon began a procurement for a more affordable state marketplace solution. Nevada is in the same situation and is considering a plan to replace HealthCare.gov with a proven technology vendor whose pricing structure is aligned with enrollments rather than health plan premiums.

Faced with HealthCare.gov’s actual costs, Oregon, Nevada and New Mexico reacted in similar ways by asking for a phase-in of the new federal technology fees and a fairer method for determining fees owed to allow for financial stability for the marketplace and carriers. Nevada asked that HealthCare.gov – because it is now collecting vendor fees – act more like a private technology company than a government agency. Nevada rightly expects HealthCare.gov to partner with states to ensure marketplaces have accurate and up-to-date enrollment information, and that it serve as a single source of truth for all of the marketplace’s health plan enrollments.

Everybody wins when HealthCare.gov is priced for all states at its full and accurate cost.

While the four states facing HealthCare.gov’s actual costs prepare to pay the new technology fees or avoid them by switching vendors, the outcome for the remaining 34 HealthCare.gov states is less certain. HealthCare.gov continues underpricing its technology fees in those states, and they can’t be certain how long this will continue under the next administration. Taking action now will allow all states to ensure their citizens can access affordable health coverage for years to come. Because HealthCare.gov must obtain permission from the White House’s budget office each year it wants to continue underpricing for its services in those 34 states, a new administration may be less amenable to continuing the budget shortfalls associated with HealthCare.gov – which amount to $621 million in 2016 alone.

The state exchange market has matured since those technology vendors failed to deliver functional and sustainable technology in Oregon, Nevada, New Mexico and Hawaii. Private sector alternatives to HealthCare.gov are available and can be a significant cost benefit to states. Moreover, these private vendors can work with a state to configure the exchange in ways that increase enrollments by recognizing that states each have unique needs and programs.

Now that Commercial-off-the-Shelf (COTS) products support the exchanges that are operating smoothly and effectively in states including Massachusetts and Arkansas, states should be allowed to benefit from private sector vendors such as hCentive competing with HealthCare.gov on a level playing field – in every state. Tell us what you think.

Read hCentive’s comments on the federal government’s plans to continue undercharging for HealthCare.gov in 34 states.

Open enrollment for 2016 health coverage has begun, and people across New Mexico, Nevada, Oregon, Hawaii and other states are using HealthCare.gov to search for quality health coverage that they can afford. Already impacted by average rate increases of 11.4% in Nevada, 24% in Oregon, and 30% in Hawaii, HealthCare.gov is proposing to add a new user fee of 3% on top of existing premiums for these states.

Vendors failed to deliver, and four affected states used HealthCare.gov for free.

User fees charged on top of health plan premiums were expected to allow state marketplaces to be financially sustainable without additional federal support. But the original technology vendors in states like Oregon, Nevada and Hawaii never delivered functional exchange technology – and hundreds of millions in federal taxpayer dollars later, those states moved from their failed technology to using the HealthCare.gov platform – free of charge.

This new set of HealthCare.gov fees is likely just the beginning of new federal technology fees for states using HealthCare.gov – placing affordable plan premiums continually at risk.

HealthCare.gov user fees will need to be increased further because for the last three years, the federal government has been undercharging or not charging states at all for the costs of HealthCare.gov. Federal policy and a recent Supreme Court ruling confirm that Congress directed HealthCare.gov to be financially self-sustaining, just like state marketplaces. But the federal government has never made HealthCare.gov self-sustaining and in 2014, 2015, and 2016 has taken funding from other programs to recover its over $600 million deficit incurred from running HealthCare.gov at a loss. The only direction HealthCare.gov user fees and plan premiums can go is up.

New proposal for technology use fees in Nevada, Oregon, New Mexico and Hawaii.

Last month, hCentive sent warning letters to Insurance Commissioners in HealthCare.gov states alerting them that the federal government has declared that current fees charged to carriers do not fully support the costs of running the multibillion dollar federal healthcare exchange. Days later, the federal government announced it intends to levy hundreds of millions of dollars in new HealthCare.gov technology use fees on Oregon, Nevada, New Mexico and Hawaii – fees that could harm these states’ marketplaces. The proposed new fee – 3% of premiums – is on top of existing fees states need for local marketplace operations and will hamper states’ ability to ensure state specific rules and policies are enforced, and local community needs are met.

Looking to the private sector for HealthCare.gov alternatives that are better suited to states’ needs.

Given these new federal rules and responsibilities for states using HealthCare.gov, it should come as no surprise that states are realizing HealthCare.gov is going to continue to increase in price, was not built with states’ unique needs in mind, and therefore, many states are actively exploring other options. They are right to do so.

Technology firms like hCentive – with its State Exchange Lease offering – are well positioned to offer financially sustainable solutions to states as they consider alternatives to HealthCare.gov. Tell us what you think.

Josh Schultz (josh.schultz@hcentive.com) is the Senior Analyst for Government Solutions at hCentive. In this capacity, Josh coordinates all public policy and regulatory initiatives affecting hCentive’s public sector business and works to identify new avenues for states to benefit from hCentive’s financially sustainable state exchange technology. Before hCentive, Josh managed contracts with the New York State of Health Marketplace’s navigator and assister programs.
Michael Sasko (michael.sasko@hcentive.com) is the Vice President of Government Solutions and Commercial Products at hCentive. Mike brings extensive health insurance exchange experience having served in leadership roles on major government projects to include Covered California and the Federal Small Business Options Program (SHOP). On the commercial side, Mike brings a strong employer focus having served as a former Director of Strategy and Innovation and as a currently licensed agent/broker.


As per the U.S. Food and Drug Administration (FDA), there are seven approved tobacco cessation medications available to people who want to quit smoking. But  did you know that under the ACA, health insurance policies sold on health exchanges need to cover all seven smoking cessation drugs, without cost sharing, for everyone? However, not all states have ensured that this ACA requirement is being met. In fact, only a single state ensures that its health plans this requirement.

West Virginia, which has a single health plan offering plans on its marketplace, has covered all these seven medications under the health plan. On the other hand, states like Arkansas, Hawaii, Mississippi, South Dakota and Vermont, do not have a single plan that covers all seven of the smoking cessation medications. Let’s take a deeper dive into the available data.

There are 348 health insurance providers participating in the exchanges, but out of these, only 144 listed all the seven medications in their offered plans. Out of the 144, only 60 providers mentioned the no cost-sharing provision as required by the law. For the remaining providers, although no clear indication was available, but the absence of the clause could mean that the providers might have charged unsuspecting patients for the seven drugs. On the other hand, as many as 98.4 percent of these health plans cover two or more of these medicines.

State Exchange

Although 34 states have their exchanges operating through the federal marketplace, there is no substantial statistical difference for compliance with the smoking cessation requirements. On the other end of the spectrum, California, Minnesota, Louisiana, Wisconsin and Maryland are leading the charge in compliance with smoking cessation requirements, but they still far from complete compliance across all offerings. California is faring the best, with 6 of 10 health plans covering all seven smoking cessation medications without any cost sharing angle. Minnesota is next, with 3 of 5 compliant plans.

States definitely need to rethink their approach, especially those states that are burdened by high tobacco use. Smoking continues to be the leading preventable cause of death in the U.S., it is necessary that insurers offer all seven plans under their coverage options. It is a matter of providing all available options to people who are taking the steps to overcome the addiction.

In itself, the problem of noncompliance with smoking cessation requirements is a part of a larger ignorance toward several ACA mandates. For all the ACA customer protections in place, health insurers have circumvented some. For instance, use of drug formularies to exclude sicker patients or prevalence of increasingly narrow networks of hospitals and physicians that make it difficult for care seekers to get care. Through these measures, health insurers have taken advantage of more than one ACA mandate while in practice, the law is supposed to make sure that the insurers cannot take advantage of their customers.

What’s needed here is a follow up on all ACA mandates that have slipped under the radar. The administration needs to revisit aspects like smoking cessation and fine health plans that are dodging the mandates. A parallel approach would be to educate people continually on what they are entitled to through Obamacare.

With the Affordable Care Act, America has renewed focus on workplace wellness and employee well-being. The ACA discounts employers who foster workplace wellness, which in turn contributes to employee health and employer savings on health insurance. The concept is simple – employers encourage employees to participate in wellness programs, reduced tobacco use, etc. and in turn receive discounts on group health insurance.

Participation in Workplace Wellness programs differs from organization to organization. While some organizations might only require your vigilance in diet, exercise, and health habits, other organizations might dig deeper into your medical history, habits, and some very personal stuff. In fact, some organizations have subject employees to individualized targets on weight loss, tobacco use, blood pressure, and several other factors that impact their workplace wellness initiative.

Another issue related to workplace wellness is medical information privacy. At the outset of wellness programs, a lot of employers are collecting highly personal information from their employees. This exceptionally personal information, although kept safe and protected, might be illegally used by third parties or current employer to influence business decisions connected with the employee.

State Exchange

Some organizations are making optimum use of their workplace wellness initiatives. For instance, a lot of organizations are engaged in helping chronically ill workers connect with support groups, professionals, and motivational coaches who help in bettering their health habits. Under the workplace wellness initiative, employers and employees are working as partners, where one motivates other to stay healthy through various initiatives, and the other helps in running down the cost of healthcare in the organizations. This symbiotic relationship is at heart of the workplace wellness initiative, and in places where it’s actually working, it’s making a whole lot of difference.

At this moment, there is a solid argument going on between employer groups and the Obama administration. Employer groups are threatening to withdraw support from ACA if it hurts their business operations. At the same time, the administration is facing pressure from Equal Employment Opportunity Commission to fix this employee exploitation through wellness penalties under Obamacare. The EEOC is working to issue a set of guidelines which will clearly delineate what’s right and what’s wrong under the wellness initiative. These guidelines should bridge the gap between how employers are using wellness programs and how administration wants to see it used.

On March 23, 2010, President Obama signed the Affordable Care Act into a law, putting into motion a series of ups and downs that radically transformed healthcare and health insurance coverage in America. After 5 years of Obamacare operation, we have come far from a fledgling law that saw unequivocal opposition from multiple sources. Today, Obamacare supports 16.4 million enrollees with affordable health coverage through fully functional health insurance marketplaces at federal and state levels. And that’s not the only thing the law is doing for the country.

Of the people who enrolled through marketplaces, almost 87 percent people were able to get premium tax credits and cost sharing subsidies on their health insurance. The millions of dollars put aside by the administration for these subsidies defined the coverage status for families, which could not afford health insurance before. The benefits do not stop there. For people who used to pay thousands of dollars in healthcare for preexisting medical conditions, the ACA worked out to be a saving grace that stopped discrimination against them on the basis of their health. Insurance companies cannot deny people coverage, neither can they charge chronically ill people higher than healthy people. Individual cases where Obamacare literally transformed into a life savior are way too many, and with these subsidies on line, ironically on the 5 year anniversary of the law, the future of the law is uncertain.

State Exchange Lease

The ACA has not forgotten the quality of coverage received by those who utilize their health insurance coverage. Screening for chronic diseases is not chargeable. In fact, some employer-sponsored programs are offering incentives to employees for undergoing routine checkups. The workplace wellness programs are working in favor of employees by offering them a chance to stay healthy at workplace, thereby reducing the healthcare spending by employers, resulting in a win-win situation for both. At the same time, the Obama administration is working with insurance carriers to provide better solutions and offerings through the marketplaces.

Seniors are now paying lesser for their drug costs, and young individuals can stay on their parents’ plan until the age of 26. All these small changes to the way healthcare coverage functions in America are making a huge difference to areas that have traditionally been ignored. As a result, we are moving to a healthier nation, where the health reform is helping people live healthier lives.

However, after these 5 years of Obamacare operation, there still are some issues that need addressing. Some workplace wellness programs have started discriminating against people on the basis of their current health. For instance, overweight people are being assigned weight goals, non-fulfilment of which would result in higher insurance premiums for these employees. This masked form of discrimination is surfacing, and the administration needs to address before it becomes more widespread.

Republicans are targeting the functioning of the law again, and with Congress under their wing, they might do some serious damage to the law. The Supreme Court subsidy challenge is another simultaneous looming challenge that could wreak havoc on the subsidies that connect millions to affordable health coverage. It’s time for the administration to revisit the law and strategize to overcome these potential challenges before they become major hurdles to progress on healthcare.

While the arguments in the U.S. Supreme Court were primarily about the context, the individual meaning, and the impact of the challenged words, the focus was primarily the impact that would result if the Court were to rule in the favor of the plaintiffs. Lost subsidies, additional pressure for states to build exchanges, and necessity to raise the health insurance premiums are just a couple of major things to think about. Fortunately, most of these instances show that the Justice panel is inclined toward keeping the subsidies intact and shooting down the lawsuit.

6) Why create Federal Exchange at all? – Liberal justices collectively asked what was the purpose of having a federally facilitated marketplace when the administration did not intend to provide subsidies and tax credits, and, moreover, why would health insures sell on it? The Justices believed that there were no benefits available through the federal exchange if the subsidies were removed, and trapped plaintiff advocate Michael Carvin on the statements he made in 2012, when he cited that without subsidies, health insurers will have no reason to sell their products on the exchange. The premise behind this was simple – the federal exchange was created to provide subsidies to states that did not have their own exchange.

7) Plaintiffs lost key ground in their arguments – Amid this argument of “why have a federal exchange at all,” plaintiffs lost key ground in their discussion with the panel. Plaintiffs have argued since the beginning that the Obama administration failed to see the state side of things in their rollout of the law. They did not evaluate how many states wanted to go with the ACA marketplace method, and that’s why they included the “established by the state” clause into the law. This would indirectly motivate states to establish local exchanges if they wanted to have subsidies. However, this key ground was lost in the wake of the question that why did the administration federal marketplace at all.

8) On the other hand, Justice Samuel Alito felt that the case was crystal clear – For Justice Alito, the case looked simple enough – the plaintiffs are right and the statute of the law does not allow the administration to provide Obamacare subsidies to states without exchanges. Had the administration wanted that to happen, they would have used language used in other sections of the law, such as “exchange established under the act” or “established within the state.”

9) The Chevron Doctrine could be useful here – If the ambiguity in the case is maintained, the U.S. Supreme Court might refer to the Chevron Doctrine under the 1984 case of Chevron v. State, that set the precedent that a government agency could resolve the ambiguity. However, Justice Antony Kennedy felt that having an individual agency and its director decide the future of millions of dollars of subsidies is not prudent, and that the proponents of federalism should rethink how they want to approach this. Further, if that happens now, it’s not hard to imagine that an opposition government can take the same approach to kill the subsidies in states without their own exchange.

10) Jonathan Gruber was ignored in the stream of arguments – Fortunately for the Obama administration, Jonathan Gruber, the man who defected from the Obama camp after working on the economics of the law, was ignored in the whole argument.

11) The U.S. Supreme Court ruling could be delayed in a way that helps everyone – Although the Court’s decisions are implemented immediately, there was a suggestion from Justice Samuel Alito that talked about issuing the decision in June but delaying its implementation until the end of the tax year. That way, the decision’s impact can be minimized by giving states, health insurers, and people additional time to get things in order. Insurers would be able to manage their offerings by taking the decision into account and people would be able to manage their finances in the absence of subsidies.

The U.S. Supreme Court will be announcing its decision on King v. Burwell in late June, and there are some rumblings that the decision might be delayed. For a decision that influences health plans across the country, affects 34 states without health exchanges, and burdens millions of people in affected states with a renewed health coverage challenges in the absence of subsidies, this delay in decision could probably be a bigger challenge than the decision itself. While it is still not clear which way the wind would blow, the discussions and arguments presented to the court on March 4 gave clues to how the case might turn out.
Some states have already started thinking about their contingency plan, and with powerful healthcare technology that overcomes the perennial challenges of traditional state exchanges, a solution might be possible. However, it’s imperative to know how this is going to shape up. Here are 11 instances from Supreme Court discussions that give a glimpse into how the panel of judges might take this ahead.

1)    Judges were concerned about the Standing of the Plaintiffs – When the arguments were being presented, the starting concern of Judges was the Standing of Plaintiffs. Justice Ruth Ginsburg picked up a recent news mention that insinuated that the Plaintiffs might not have the right to file this suit because some of them had access to other insurance, and this very access challenges their standing in the case. While Plaintiff attorney Michael Carvin assured the Court that at least one plaintiff had standing, the administration suggested that the Panel might want to recheck that part.

2)    Justices Interpreted the Contested Four Words Themselves – Since the whole argument is about those four words “established by the state,”,Justice Stephen Beyer interpreted these words to show Michael Carvin that they have treated these words too narrowly while filing this suit. Stephen Beyer then explained that the idea was to have a federally operated exchange that functioned as a close equivalent of a state operated exchange to provide tax credits to people in states that did not build their own exchange. It was clear what the law was talking about, and this misconstrued interpretation was not helping the system in any way.

3)    Justice Elena Kagan Reinforced the Idea of Interpretation of Text as a Whole – In a similar fashion, Justice Kagan suggested that the plaintiffs should reevaluate their argument by viewing those words in context of the entire law, and not in isolation. The federal exchange was a fallback mechanism for those states which did not establish their own exchange, and that’s what the entire law suggests. Isolating a section of text to build an argument that refutes the meaning of the law as a whole was not making the cut for Justice Elena Kagan.

4)    Federalism Ruled the Roost at the Arguments – Citing unconstitutional actions that might result from the suit, Justice Anthony Kennedy clearly demonstrated that it would be wrong if the Courts used the plaintiff’s argument of verbiage in the law and ignored the complete picture of the subsidies. With so much at stake and so little time to curb the damage that might result, it would be entirely wrong to deliver a decision that unconstitutionally coerces states to build an exchange to safeguard their health insurance subsidies. The idea was to support the law and the federal-state exchange relationship that was originally suggested by ACA.

5)    Intention vs Execution turned out to be a major problem – The argument of federalism supports that the Obama administration always intended to have federal exchanges as a fallback mechanism for states which did not establish their own exchange. However, Justice Scalia was more concerned with the execution during the writing of the statute. Justice Scalia said that this might not be the intended statute, but it is definitely the statute that was delivered in written, and for that, he was in favor of slamming the subsidies. Scalia also mentioned that since the statute was rushed, it was never properly evaluated, and that this should go back to the Congress for rework if they wish to avoid the consequences resulting from an absence of subsidies in the market. It was very clear that Justice Scalia was in favor of the plaintiffs.

In the next part of this series, I will cover the remaining instances that will give a closer look at how King v. Burwell might end for the involved parties.

Obamacare has turned 5 and the journey has been far from comfortable. Fortunately amid challenges from opposition, a dysfunctional initial rollout, and slow acceptance of the law, Obamacare has still achieved what it set out to five years earlier, even if there is a lot more ground to cover in the coming years. Owing to the law, the US healthcare industry has seen massive improvement in the way healthcare is availed. At the completion of five years, here are 5 numbers that show the major strides of the government, the impact of the law, and the avenues that require attention in the coming years.

1) 16.4 million have enrolled through Obamacare marketplaces – The biggest achievement the ACA has delivered is the mammoth 16.4 million enrollments through the exchanges in two open enrollment seasons. When ACA was implemented, 47 million people did not have health insurance. Although the number continued to grow over the years, 16.4 million of those people found affordable health insurance through exchanges. Out of these, as many as 85 percent were able to avail subsidies and cost assistance from the government for keeping their health insurance premiums in check.

2) $7.4 billion dollars were saved by Hospitals in uncompensated costs – Combining the effect of health insurance marketplaces and Medicaid expansion, hospitals have been able to save $7.4 billion in uncompensated costs. Before ACA, hospitals have covered insurance care for uninsured and underinsured. Hospitals delivered about $50 billion in uncompensated care in 2013. Medicaid expansion under ACA has also played a major role in cost savings. For instance, states that expanded Medicaid experienced a 26 percent reduction in their costs, while states that did not expand Medicaid experienced only a 16 percent reduction.

3) 29 States and DC expanded Medicaid to complement the coverage net of ACA – Medicaid expansion was a crucial aspect of the working of the ACA. Although the U.S. Supreme Court shot down the mandatory expansion of Medicaid under ACA, it left states with a choice to support the law through expansion. 29 states and DC expanded Medicaid to cover healthcare costs, and these states were able to observe a huge improvement in their healthcare cost savings and coverage net. People did not fall into the coverage gap, which opened up in states that decided not to expand Medicaid.

4) $88 billion  has been foregone by States that decided not to expand Medicaid – The remaining states which decided not to expand Medicaid left their residents between a rock and a hard place. At the same time, these states let go of $88 million  in federal grants, which they would have received between 2014 and 2016 if they had decided to expand Medicaid in their state. With a limited healthcare system of these states, residents will be less likely to use medical services, which would ultimately impact the contribution to national economic growth. Without Medicaid, a lot of people will not use medical services, and this will play a detrimental role in the coming years. For instance, by 2023, Florida will lose out on $270 billion national economic impact because it did not expand Medicaid.

5) $1.2 trillion will be Obamacare’s cost for the next decade – Owing to a close check on healthcare spending and healthcare costs, Obamacare will be costing about 11 percent less than earlier estimates. Over the next decade, $1.2 trillion will be spent on Obamacare. Other than the control of ACA on healthcare spending, lower costs of health insurance subsidies will contribute to lower spending. Assuming that the law lasts for that long and is not strangled by the Republican repeal efforts, there is a lot Obamacare can change in the healthcare system.

11 million enrollments and a successful second open enrollment later, the Obama administration should be happy. Enrollment numbers are higher than initial projections, and the signs of a working health reform are omnipresent in the system. Health insurance carriers are adapting to the new marketplace scenario, and are offering better plans at better prices to marketplace shoppers. In addition, citizens are embracing the health insurance marketplace. Collectively, both the providers and shoppers are maturing with the system, and all of this is fueling the success of the ACA.

Out of the shoppers this year, about 4.2 million are returning customers who have revisited the improved marketplace to check their existing plan, weigh available benefits, and upgrade their plans for better benefits. A noteworthy aspect of these shopping trends is the underlying shopper aggression for utilizing market competition to find better health plans with cheaper premiums. Let’s take a look at the behavior of returning and new shoppers, and how they interacted with the marketplace to find the plan that fits their requirements.

The first segment of people is returning customers who automatically reenrolled with their previous plan. Roughly 2 million people chose to stay with their existing plan, and none of them revisited the exchange to weigh available options. Of the remaining shoppers in the 4.2 million returning customers, a little more than half went for new insurance plan this year, while the other segment continued with their existing plan. Nearly 1.2 million people enrolled with a different plan in the second enrollment. While this might not seem like a big number in comparison to the enrolled 11 million, past health insurance industry trends say that this is a pretty big number.

According to CMS, a lot of insured are actively and aggressively seeking better insurance options, and this high number of active consumers is surprising for the health insurance industry. At a preliminary stage, there are two possible reasons why revisiting shoppers looked for new health insurance. The primary reason is cost. Owing to entry of new insurers in the market and adjustment of last year’s premium prices on the basis of available data, a lot of insurance plans offered cheaper health insurance with nearly similar coverage. Another factor that boosted plan switching on cost basis was the subsidy averaging, which considers the cheapest plan available in a consumer’s area while issuing premium tax credits to consumers. So, people who had the option to retain their older plan were likely to be subject to a higher cost as a cheaper plan was available in the region, and the subsidies were to be calculated accordingly. Naturally, a lot of people decided to switch.

The second probable reason for shopping is coverage quality. To retain profitability and market edge, a lot of insurance plans have limited their physician networks. A lot of plans have also included high out of pocket costs. It is possible that a lot of people changed their plans because they wanted access to a wider network or limited burden of deductibles, co-payments and the works. Add the remaining number of 4 million plus people who were using the exchanges for the first time, and you will have considerable shopper movement across the marketplace.

While it is still early to stay exactly what factors contributed to this aggressive shopping surge on the health insurance marketplace, one thing is certain – as the insurers and shoppers mature in the ACA model, a lot of streamlining will automatically happen in terms of coverage options, competitive pricing, and physician networks. Both these forces are still moving to a state of equilibrium, and in the next couple of years, the nature of shoppers will change to reflect that stability. For now, health insurance shoppers are working to make sense of the marketplace and aggressively switching health plans for arriving at their desired combination of price, coverage, and network.