Forget the plan – let patients keep their doctors!

I think there are two important points that are missing from the intense media focus — and now the White House response – to the problem of the insurance cancellation notices on the individual market.  Both are the result of actions that have been taken by insurance companies which are now participating in the exchanges — in other words, they are barriers to acceptance of ACA created by the same insurance companies that are the chief beneficiaries of the new, heavily subsidized insurance market.

The promise that “if you like your insurance, you can keep your insurance” was essentially written into the law, by the express terms of the original ACA legislation. There was a “grandfather” clause which expressly allowed consumers to keep whatever plans they were enrolled in prior to March of 2010, subject to some requirements to strengthen those plans.

The problem is that many consumers who buy their own insurance on the market have switched plans since then, giving up their grandfathered status.  It’s not that they didn’t like the plans they had; rather, those plans got too expensive. So very often the switch was to another, seemingly better or less expensive plan offered by the same company.   

In hindsight, it seems that the offers of the new, non-grandfathered policies were intentional. As writer Kevin Drum speculates,

 I think that most of the canceled policies have been canceled because insurance companies wanted to cancel them. They were designed in the first place to entice buyers away from their old grandfathered policies, and insurance companies did this explicitly so that they would be free to cancel them when 2014 rolled around. This allowed insurers to replace them with more expensive policies without taking any heat for it. They could just blame it on Obamacare.

This policy-swapping provided an additional financial benefit to the companies that chose to participate in the health marketplaces:  a ready source of customers for the new ACA plans.  This is reflected in the practice of the rollover offer: most of the cancellation letters include a default plan to roll the consumer over into a new, more expensive plan sold by the same company.

The second insurance-created problem is the shrinking provider network.  Although premium prices have gone up for many consumers, others will be eligible for significant subsidies that may reduce their premiums well below anything they have paid in years.  Unfortunately, however, they may not be able to see the same doctors.   Insurers which have had market dominance in their states for years are trimming their provider networks. These are the major facilities that took every insurance — now, suddenly, they are off-network.

I think that many consumers would understand the higher premiums — after all, that’s part of the price of guaranteed insurability for all.   But losing access to the leading hospitals or health facilities in one’s home community is harder to swallow.

I don’t think that an extension of the grandfather provisions will do anything to address the true problems.  An annual premium increase is nothing new — but in the past, those PPO provider networks were fairly stable.

I understand the pressures on insurance companies to hold down costs.  I consider the negotiated rates between the insurer and network providers to be one of the chief benefits of having insurance:  I’m unlikely to even meet my deductible in any given year, but I see the benefit of having insurance when I receive an Explanation of Benefits showing that my $375 lab bill has been reduced to $65, or that I owe my doctor $40 for a visit instead of the $200 that the doctor would like to bill.

But my doctor’s name isn’t even on any of the new networks. I can’t figure out whether this is because my doctor has decided not to participate, or simply a lag in paperwork — but the point, word is out that the networks are being reduced.  We patients don’t really care about which company sells us insurance, but we do care about the providers who treat us.

So I’d propose this fix:  a regulation that extends the same benefits that the law requires for out-of-network emergency care to treatment from any doctor or facility which had established a continuing relationship with the patient prior to implementation of ACA.  If the medical records show that the patient received care from a particular doctor or hospital at any time in 2013, then that patient should be able to continue to see the same provider in 2014 – at least if the patient chooses to sign up for any type of plan other than an HMO.  This doesn’t mean that that provider needs to give the out-of-network provider the same “preferred” status — a tiered system of patient copays might suffice to encourage consumers to see the doctors the insurance companies prefer — but at least the patient should be assured of continuing care with the shift to an ACA-compliant plan.

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6 thoughts on “Forget the plan – let patients keep their doctors!

  1. One thing these developments argue for is a Kaiser-Permanente type model of integrated health care delivery “under one roof” (which I am coming to believe is the most viable model for health care). People insured by KP will have their same doctors as long as they move to a KP plan, and in any case have a better possibility of continuity and coordination of care among different doctors and specialists. With other insurers it may be hit or miss with regard to your primary doctor, local hospital, or specialists, although in the past there has always been the risk that certain providers could be excluded from your plan (I recall while on Blue Cross employer plan in the ’90s, we would get letters every year from BC warning us that they may not reach agreement to renew our major local hospital in their preferred provider group).

    As to Kevin Drum’s point, I don’t think it is correct to assume that people moved to non-GF plans were (in all cases) being taken advantage of. Pre-PPACA, insurance companies routinely introduced new plans to comply with changing tax and insurance laws (e.g., changing HDHP maximums for HSA plans) and to offer higher deductibles in exchange for lower premiums (as many buyers would want). I switched in 2012 from a 2006 GF plan to a 2012 non-GF plan and took on a higher deductible (from $4k to $5.2k) to slightly lower my premiums and specifically to avoid a 25% premium increase (24% of which was from moving into the age 55-59 bucket). I extensively discussed the pros and cons with a Blue Shield rep, and there was no benefit to staying on the GF plan (although there was the small caveat that all PPACA regs were not final; however the new plan incorporated some valuable PPACA benefits, like annual checkup included and no lifetime benefit maximum). I know from filings on regulator websites that my original GF plan had 11% premium increases in 2012 and 2013, and has proposed a 9.8% increase for 2014. That plan, if I were still on it, would cost almost exactly twice what a Platinum Blue Shield PPACA plan will cost in 2014, and have much higher out of pocket costs to boot.

  2. So, it’s a PPO plan, except if you have a chronic or acute disease already, it’s not a PPO plan and you can see all your old doctors? Or if you have a regular doctor that you happen to have seen last year, it’s also not a PPO? The PPO restriction doesn’t bite much; it only restricts people who don’t go to the doctor very much. And if you don’t go to the doctor very much, you aren’t the person whose costs the insurer is deeply invested in reducing, since your costs are small anyway.

    A PPO that restricts the choice of doctors, but only for people who don’t go see doctors, is not a PPO. freelancer, I think you need to re-evaluate this idea. It would cost the insurers a fortune.

  3. Actually, my idea was a transitional plan — it would only apply to new customers coming onto the new exchange plans – perhaps for the first year only. The idea is to provided continuity of care to patients who are in the position of having to change insurance plans because of the new law.

  4. I see. It still would cost a lot that first year, though, because it would allow the biggest users of health care to go out of network without the usual out-of-network charges. For that reason, I can’t see it being adopted.

  5. But how much does it cost the system overall to allow some customers to extend their old, non-ACA plans into 2014 — as the administration has authorized? At least a plan that would allow continuity of care would get more people shifted into ACA plans.

    The benefit could be limited to customers are purchasing ACA plans from the same insurance companies as they had before. The problem is really one that the insurance companies have created by narrowing their networks for ACA. So, for example, in California, consumers who have purchased PPO’s from Blue Shield or Anthem for years are now finding that their doctors and hospitals are suddenly not covered on any network.

    I did include the idea of a tiered payment system within my proposal– that would give the insurance companies some leverage to encourage these consumers to shift to in-network providers.

    I’m just looking at the very real problem of people who need ongoing care and don’t have any options under ACA for getting coverage for the doctors they have already been seeing on a regular basis. To me that’s a far more important concern than people who are simply seeing an increase in premiums (which could happen with or without ACA — insurers certainly have not been shy about rate increases in the past). I think it goes to quality of care as well as overall efficiency: it’s hard for a new doctor to come up to speed.

  6. But the “risk corridor” setup allows insurers who have been harmed by the new grandfathering rule to be made whole. (Not that there are going to be many such insurers, since most are refusing to extend the cancelled policies, or their states refused for them.) How would the insurers be made whole for the costs incurred by letting patients go back to Cedars Sinai to see Dr. Skiing-in-Gstaad?

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