Will health reform make you change doctors?

Market Watch reports:

“Some experts have said that the experience of shopping for health insurance on the new online marketplaces that will open for enrollment this October under the Affordable Care Act will be like booking a vacation on Travelocity. But for those who make the wrong insurance purchase, the stakes could be much higher than an inconvenient layover or a hotel room without a view, and consumers who base their decision on price alone may be in for some unwelcome surprises.

Chief among them: Some patients may have a difficult time seeing their current doctors under the new plans.

Consumer advocates have anticipated that the ACA will be a big help to boomers who are looking to retire early or set out their own shingle, since they’ll no longer be tethered to their job for the health benefits. Between 500,000 and 900,000 Americans could choose to stop working or retire early, based on their new options for insurance outside their job, according to a new study by researchers at the Columbia University Mailman School of Public Health, Northwestern University Kellogg School of Management, and the University of Chicago Booth School of Business. Another report, released this spring by the Robert Wood Johnson Foundation, estimated that the number of self-employed Americans will grow by 1.5 million in 2014 because access to high-quality, subsidized health insurance coverage will no longer be exclusively tied to employment.

Yet prospective early retirees or freelancers shouldn’t assume that plans on the state-level marketplaces will offer them the same doctor choices that their employer-provided insurance does. “You really need to pay attention to the network,” said Sara Rosenbaum, law professor at the George Washington University who has closely tracked the health-care law’s rollout. Economic forces behind the new insurance exchanges are putting pressure on insurers to keep prices low, and one of their main ways to accomplish that, given the law’s requirements, is to offer fewer doctor options. And while healthy 20-somethings might be happy to accept limited choice in exchange for lower premiums, that trade-off might not look as attractive to boomers who’d rather not, say, find another cardiologist.

Early evidence indicates that some insurers participating in the state-level marketplaces have limited the number of health-care providers in their plans in an effort to keep premium rates down. In insurance-speak, this is called “narrowing the network.” Of the 13 carriers currently slated to offer coverage on Covered California, for example, 10 offer coverage only through health maintenance organizations, or HMOs. HMOs typically restrict patients to a limited number of doctors and hospitals inside their network, and their prevalence on the California insurance exchange suggests “a trade-off between affordability and flexibility of provider network,” said Carrie McLean, senior manager of customer service at the national call center of eHealthInsurance.com, the Mountain View, California-based company that sells individual and small business health plans.

The HMO makes a comeback

Consumers with HMOs are generally restricted to doctors within the network. If they choose to go to a doctor outside the network, they often must pay the full price of care except in cases of emergency. HMOs generally require consumers to have a primary care doctor, and that doctor acts as a gatekeeper; to get a referral to a specialist, the consumer must go through that doctor. In a preferred provider organization or PPO, by contrast, consumers will likely face higher out-of-pocket costs if they go out of network compared with in-network, but they won’t be responsible for the full amount. What’s more, they usually don’t need a primary care physician’s referral to see a specialist. Although their premiums are often cheaper, HMOs aren’t currently popular on the individual market: just 5.2% of individual policies bought through eHealth Insurance that were active in February 2012 were HMO plans, versus 81.3% for PPOs and 13.6% for other types of plan.

While California was early in releasing plan details, experts predict the state’s experience may prove typical of marketplaces across the country. Details on insurance options on the state bazaars will continue to emerge ahead of the start of open enrollment on Oct. 1. The states that chose to operate their own marketplace, such as California, will be the first to release plan details, while the 33 states that opted to let the federal government facilitate their exchange will likely follow in September, experts have said. The Commonwealth Fund offers a map where consumers can see whether their state is operating its own exchange.

Many of the health care law’s new requirements could prove a boon to boomers on the individual market. Starting next year, insurers will no longer be able to deny sick people coverage or charge ill consumers more. Today, this practice, known as medical underwriting, is allowed in all but a handful of states. It’s the main reason behind the phenomenon known as “job lock,” whereby workers stay in unsatisfying jobs because they’d be unable to secure affordable coverage—or any coverage at all—on the individual market. What’s more, under the Affordable Care Act, all plans everywhere on the insurance market must offer a host of essential health benefits, from emergency care to hospitalization to mental health care.

Cost vs. choice

These requirements are expected to increase costs to insurers, however, and narrowing their provider network was one of the few options available to those looking to offset them. The way that works looks something like this: Insurers pay doctors and hospitals less than they would under a broader plan, and in exchange promise the providers more patient volume to make up the difference, since those providers are one of few options available within the plan.

Despite increased costs to insurers, many state regulators have encouraged carriers to keep premium prices on their exchange plans as low as possible. It is called the Affordable Care Act, after all, and consumers’ perceptions about the affordability of coverage will be key to the law’s success. David Axene, a fellow of the Society of Actuaries who runs an eponymous health-care consultancy based in Murrieta, Calif., said several of his insurer clients were asked to lower their rates after the companies submitted their initial proposals. The law was also designed to foster competition among insurers on the exchanges in order to drive down premiums.

Indeed, in addition to regulatory nudging, pricing on the exchanges will also reflect insurers’ strategies for this new market. Some carriers will rely on their existing provider networks and not price as aggressively as possible, preferring to wait and see who signs up for coverage. Others will engage in a “land-grab” approach, with low prices (and narrow networks) in an attempt to gain market share, said Terri Welter, principal at ECG Management Consultants, a Seattle-based consulting firm to the health-care industry which advises health-care providers on their negotiations with insurers.

The law’s requirements for “network adequacy” are vague: The federal minimum standard requires that networks be sufficient in number and types of providers to assure that all services be required without “unreasonable delay.” Insurers submitting applications to offer products on the state marketplaces had to include network access plans, including such details as drive times to various types of doctors, Welter said. If consumers complain about excessive wait times for appointments, then insurers will likely modify their plans and perhaps broaden their networks for 2015 and beyond, she said: “They don’t want a mass exodus out of the product.”

To be sure, the desire to keep one’s own doctors could be viewed as a privileged concern. The Affordable Care Act was designed largely to help bring coverage to previously uninsured or underinsured people. Of the estimated 5.3 million people eligible for health insurance coverage through Covered California, for example, about 4.6 million are currently uninsured, and the comprehensive benefits offered on the exchange will represent a big improvement for those consumers, said Larry Hicks, a spokesman for Covered California. What’s more, every region in California has a mix of offerings to choose from, including PPOs and HMOs, Hicks noted. Blue Shield of California PPO plans are available in many California regions, and spokesman Sean Barry said, “The quality of the exchange network matches that of our overall network.”

Looking beyond prices

For now, consumers must prepare to do their homework and look beyond premium prices when making their plan selection. Within each of the four metallic coverage tiers—platinum, gold, silver and bronze—the least expensive plans will likely have the narrowest networks, Rosenbaum said. Consumers looking for the broadest networks will likely find them in the two highest tiers, gold and platinum, which will cover more of consumers’ out-of-pocket costs in exchange for higher premiums, she noted. It’s important to look not just for your own doctors, but also for specialists available in the event of a devastating diagnosis, experts say. For example, if there’s a history of cancer in your family, it would be good to know that your network includes top oncologists in your area.

It will also be important for patients to look beyond plan names. A plan might be called a PPO, yet it could charge much more for out-of-network services than a typical employer-sponsored PPO, in an effort to keep consumers inside the network, Rosenbaum said. In addition to network coverage, of course, consumers must also evaluate each plan’s deductibles, copays and coinsurance (the portion of each bill the patient must pay).

In short, shoppers must analyze the adequacy of a plan to meet their needs alongside the plan’s affordability, said Kevin Lucia, research professor at the Center on Health Insurance Reforms at the Georgetown University Health Policy Institute: “It doesn’t matter how much money you have, you still want to get in the right plan.”