When searching for healthcare plans on Healthcare.gov, potential enrollees are faced with a choice between large numbers of plans. It is not uncommon to find 20 or 30 plans available within a single zip code. In general, healthcare plans are expensive and the array of choices is quite confusing for most users.

Before LMI became involved, the premium calculation was already in place and properly took into account premium subsidies based on income level. However, a calculation was needed for the cost sharing amount that included other factors:

• Cost sharing variants based on income level
• Family composition
• Relative degrees of healthcare usage for each member of a family.

LMI developed a calculator that estimates total out-of-pocket costs (money paid when you get services, abbreviated as OOPC) and greatly simplifies the work of choosing a healthcare plan.

The Method behind the OOPC Calculator

The calculator steers consumers towards plans that are most appropriate for them by showing them total costs for a given healthcare utilization, including premiums and out-of-pocket cost sharing. To do this, it requires users to enter the number of family members, their ages and genders, and a relative healthcare usage amount for each family member (low, medium, or high). As they select one of these three utilization levels, the calculator displays a summary of the usage associated with that selection (numbers of physician visits, lab tests, prescriptions, days in the hospital, and other expenses), giving them an idea of what each level represents.

The calculator then computes total OOPC for all healthcare plans available to the family, combines those values with subsidized premium amounts, and displays a total cost to the consumer for each plan. Users can see a list of plans available to them sorted in order of increasing total cost, inclusive of subsidies, premiums, and cost sharing for the utilization levels specified. The computations are done in real time and appear quickly once the user completes his or her family information.

The approach used by the OOPC calculator is different than other calculators in the marketplace for three major reasons:

• First and foremost, it is the only place where potential enrollees can see the combined effect of premium subsidies and out-of-pocket costs combined.
• Secondly, it uses a unique state-of-the-art method for rapidly and accurately computing out-of-pocket costs.
• It is driven by real claims data detailing benefit-level cost sharing data (copay, coinsurance, deductible, etc.) from each plan in the Federally-facilitated Marketplace, and the user family demographic inputs described above.

Making the OOPC Calculator Available beyond Healthcare.gov

Without an OOPC calculation, people tend to make bad choices when it comes to healthcare. For example, in many cases, it makes sense to select a lower metal-level plan, such as the bronze level rather than the silver, gold, or platinum levels. But some people might choose a higher level because they don’t have a way to calculate their likely annual cost.

With over 20 years of healthcare data plan experience, LMI is expanding the tool to be used in state-based marketplaces as well as private organizations. LMI works with the Medicare Advantage program (17 million enrollees), the Medicare Accountable Care program (8 million assigned beneficiaries), and Federally-facilitated Marketplaces (9 million enrollees).