Study: States should limit number of plans in exchanges


States have looked to the dueling examples of Massachusetts and Utah — the only two states with exchanges that predate the Affordable Care Act — as they try to decide how best to structure their new marketplaces.

Conservatives favor the Utah model, while consumer advocates say exchanges should be “active purchasers” that have the power to negotiate directly with insurers.

Massachusetts’s experience shows that consumers prefer an active purchaser model, even though it could limit their choices, Day wrote.

“Findings from consumer research emphasized the value of limiting insurance plan choices on the exchange,” her analysis states. “Specifically, early focus groups showed that consumers wanted four to six carrier options at ‘low, medium, and high’ benefit levels.”

Consumers said they were anxious about the complicated process of choosing an insurance policy, and reported that they felt “overwhelmed” by the marketplace outside of a structured exchange, according to surveys the Massachusetts exchange conducted.

“Consumers valued having a range of options to choose from but also wanted the ability to obtain detailed information and were suspicious of apparently hidden information,” Day wrote, with co-author Pamela Nadash, a professor at the University of Massachusetts, Boston.