Jan 2, 2024 - Health

AI may make shopping for health insurance less painful

Illustration of a hand reaching out darkness towards a hand in a white lab coat reaching out of a computer

Illustration: Sarah Grillo/Axios

For all the frenzied speculation about how AI can transform health care, some companies are leveraging the technology for a decidedly simpler but still critical task: making shopping for health insurance less terrible.

Why it matters: Many Americans typically stick with their health plan year after year even when better and cheaper options are available, often because it's too hard to predict how much care they'll need or figure out if they can actually get a better deal.

  • Companies are rolling out AI-powered tools aimed at making the shopping experience easier, and even brokers and agents selling health plans say they see the technology as a helpful aid, rather than an existential threat.

Context: The tools can be especially helpful for the tens of millions of people purchasing private Medicare Advantage plans or shopping for their own coverage on the Affordable Care Act marketplaces.

  • While employees covered through their workplaces may just have a few plans to pick from, the average shopper on the ACA marketplaces during the current enrollment season has 100 plan options, with differing levels of cost and access to health care providers.
  • The number of Medicare Advantage plans available to the average enrollee in recent years has more than doubled to 43, according to health policy research nonprofit KFF.

How it works: The AI tools generally gather basic information about an individual insurance shopper and their expected health needs and then use that data to churn out predictions for the best health plan options.

  • Alight, a company providing cloud-based HR services, said 95% of the employers it serves used AI technology — including a virtual assistant feature — to help employees pick health benefits during fall open enrollment.
  • The Big Plan, which launched last year for ACA open enrollment, bills itself as an "AI-driven health insurance matchmaker." Its tool offers up the best three health plan options available to a customer based on several factors, including their income, prescriptions and preferred doctors.
  • Healthpilot, an AI startup specializing in Medicare coverage, markets itself as removing the "commission bias" brokers may have to steer patients to certain health plans.

Health insurance brokers who work with companies and individuals say increasingly advanced AI could actually be helpful for business, even as workers in many industries worry the new tech could take their jobs.

  • "AI is going to enable us to free up some of those tasks that could be routine and could be automated to allow us to be more personal" with clients, said Jessica Brooks-Woods, CEO of the National Association of Benefits and Insurance Professionals.
  • The industry trade group is training internal staff on AI and in early 2024 will roll out an "app store" that will make these sorts of tools available to members.
  • Not everything is being turned over to the machines. Startups like The Big Plan offer customer service advice from humans in addition to their AI platform.
  • "AI is great, and it's fantastic, and can respond to so many different things. But it doesn't always have a psychological understanding" of what customers are seeking, said CEO Carey Gruenbaum, who worked as a broker for more than 20 years.
  • One study looking at an AI-based decision tool in a Medicare Advantage marketplace found it saved consumers $278 on average and made the quality of brokers' help less variable.

Reality check: Technology-driven tools that help people pick health insurance aren't exactly new.

  • For instance, the ACA insurance marketplaces and Medicare.gov all offer varying levels of decision-support tools to recommend health plans right for customers, noted Zarek Brot-Goldberg, an assistant professor at the University of Chicago studying health care markets.
  • But the current hype around AI could boost consumer interest in the tools, or at least give companies a new angle for promoting them.
  • "Now we can repackage them as AI-driven," Brot-Goldberg said.

What they're saying: It's still probably best to get some input from a professional, said Louise Norris, a broker and policy analyst at healthinsurance.org.

  • "Decision-support tools are designed to make it so that folks can DIY this process. But there's no real upside to a DIY approach because you don't pay anything to have the help of a broker," Norris said.
  • Brokers can help shoppers decipher health insurance terminology — which many consumers don't understand — and provide advice as they sort through plan options, she said.
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