SAN DIEGO – As the conversation around the implementation of the Affordable Care Act moves beyond the troubled federal Healthcare.gov website, attention is turning to the details of the insurance products being sold through the federal and state exchanges.
Like other regions throughout the country and California, most of the insurance companies selling individual policies in San Diego through Covered California have limited their provider networks to try to hold down premiums. Consumers who already have individually purchased policies are likely to face limited access to doctors and hospitals throughout the region, and some could face marked changes in access to the health care providers they've become accustomed to using.
The Affordable Care Act has stripped insurers of a number of tools they historically have used to manage financial risk. Benefits must be standardized, there are limits on out-of-pocket costs and medical underwriting is a thing of the past.
"When you put all that in the blender and try to make it affordable what's left to control cost is the network itself," said Patrick Johnston, president and CEO of the California Association of Health Plans.
Six insurers are selling individual policies through Covered California in San Diego:
- Blue Shield;
- Kaiser Permanente;
- Molina; and
It's difficult to quantify just how narrow some of the provider networks are compared with those being sold outside of Covered California, and the networks remain in flux. But, a Los Angeles Times analysis of insurance data conducted prior to Covered California's Oct. 1 launch found that Health Net's exchange plans have provider networks one-third the size of those available through its employer policies. In San Diego for example, the company included only 204 primary care doctors to serve patients. Statewide, the Times reported that Blue Shield of California would provide exchange customers with access to about 50% of its regular physician network.
"It's my understanding that 30 to 35% of all San Diego doctors will be in Covered California plans," said Craig Gussin, principle of San Diego-based Auerbach & Gussin Insurance and Financial Services.
It's not hard to see why. According to Theodore Mazer, a San Diego otolaryngologist and speaker of the California Medical Association's House of Delegates, in some cases insurers in San Diego have offered doctors reimbursement rates as low as 56% of what Medicare reimburses. "That's just basically above Medicaid, and pretty un-survivable," he said. As a general rule, according to Mazer, typical PPO physician reimbursement rates in San Diego range from 95% to 120% of Medicare rates.
This new landscape has fundamentally altered the way insurance agents approach their work with clients looking to purchase a new health insurance policy, according to Gussin. "In the old days, I'd say, tell me what plan you're looking for and we'll figure it out. Now I say, tell me who your doctors are. Once we know what plans they're in, then I'm going to come back and tell you, here are your options, unless you want to change doctors," he said.
Confusion Is Widespread
Even guiding one's health plan selection process by first looking for preferred doctors and hospitals and the plans with which they participate may not prevent patients from facing surprises when they go to make an appointment after the first of the year.
Attempts to determine which plan a physician accepts might end up ultimately being wrong, experts say.
New partnerships created for Covered California plans are likely to cause confusion. For example, Blue Cross in San Diego has contracted with Sharp and UC-San Diego, so members signing on with one of the Blue Cross plans being sold through Covered California will face new limits on the physicians and hospitals they can use. "So if you're a Scripps person, you're not going to be having Blue Cross. Blue Shield only takes Scripps, Palomar and Pomerado," Gussin said.
In addition, the product offerings have changed -- a critical detail that may escape notice even among participating physicians.
"We call the doctor's office and they say, 'Oh, yeah, we take Blue Cross PPO.' Well, they do today, but they don't realize that starting in January, it's not a PPO, it's an EPO. So now there's no out-of-network coverage, and Blue Cross in San Diego only takes Sharp and UCSD doctors and hospitals," Gussin said.
Many consumers in San Diego who have Blue Cross coverage now are accustomed to using another of the region's large providers -- Scripps -- but they will no longer be able to access Scripps depending on which plan they pick. And in many cases, physicians can't help their patients sort out the details.
"Doctors' offices have no idea. We have insurance companies' websites that we think are right. But we have no idea if once a doctor realizes how little they're going to get paid, are they going to say, 'No, we're not going to be taking that Covered California plan,'" Gussin said. "In my opinion now it's a total mess because no one really knows which doctors are in the network."
Mazer acknowledged that he and many of his colleagues remain unclear about the makeup of the provider networks, even at this late date. "When [insurers] let these products out earlier this year, they sent memorandums of understanding and asked, 'Are you willing to participate in the exchange product without rates being listed?' Well, most docs are bad businessmen, but we're not that bad that we're going to sign a contract where we don't know what we're going to get paid," he said.
Mazer added that he is concerned about whether patients really understand what products they're signing up for and how their access to physicians may be altered. "Do they understand when they call us in January and they say, 'I have Blue Cross,' and we say, 'Which Blue Cross product? Sorry, you can't come here anymore, you're in the exchange and you have a limited network.' That's a big issue."
Not a New Idea
The concept of tight provider networks is hardly new. Early HMO models relied on them and in recent years employers have been toying with bringing these models back into play, according to John Bagley, a Southern California-based senior health and group benefits consultant with Towers Watson, an employee benefits consulting firm.
"In light of trying to focus on both quality and cost, the narrow network is one of several tools in the shed that employers and carriers are developing and promoting," he said.
But they also exist and thrive in the San Diego market primarily through two leading HMOs operating in the region -- Sharp Healthcare and Kaiser Permanente.
"We're using existing commercial networks that we already use within our market," said Melissa Cook, CEO of Sharp Health Plan. "We have current clients that are utilizing them, and we did not create any new networks. We felt that was very important so that we could maintain high quality and high service levels," she said.
Kaiser Permanente members have access to the same network of doctors and hospitals whether they're covered by Medicaid or a platinum-level policy, according to Gussin.
Although limiting choice is often perceived negatively, particularly when it comes to consumers' access to their doctors and hospitals, stakeholders agree narrow networks have real advantages when they are employed effectively.
"When you have a narrow network, especially one that is built around an integrated delivery system, you really have improved and enhanced coordination of care," Cook said. "It really allows you to establish very strong relationships with your patients and your members. So, that allows us to improve quality, it allows us to improve service and member satisfaction."
Will Consumers Choose Plans With Narrow Networks?
In the end, the success or failure of narrow networks will depend on how they're used, and whether they'll be able to perform to the standards health care consumers in San Diego expect.
Experts say the exchange environment's inherent competition, regulatory requirements to provide adequate networks and consumers' ability to switch plans each year at open enrollment time will put pressure on insurers to maintain network adequacy.
If they can't, Johnston said, "[Consumers] have the power every year at open enrollment to vote with their feet and to go to a different plan without the fear that a pre-existing medical condition will prohibit them."