As more of the Affordable Care Act is implemented, patients are becoming aware of another facet of the law’s intended consequences, “narrow networks”. One of the architects, Jonathan Gruber, has confessed that the law’s mandates on health insurers would indeed limit physician networks. A recent study by Mr. Gruber points out that this design is to control costs. In short, this means that while you may be covered by health insurance, you might be surprised to see which providers are actually covered under your health plan. In fact, in 2015 nearly half of the plans offered on the health exchanges are narrow networks and an additional 20% are considered to be “ultra-narrow”.
A study by the McKinsey Center for U.S. Health System Reform shows that patients who chose such plans last year have stayed with them. However, patients who do not understand how the plans work are finding themselves responsible for extremely high bills. And as pointed out recently in the Washington Post, patients are “predictably frustrated” when they learn that their physicians are not covered. For example, while a hospital may be in your plan’s network, the physicians that a hospital contracts with (e.g. anesthesiologists, radiologists, emergency physicians, etc.) may not be, thus leaving you with bills for out-of-network charges.
To be clear, the narrow networks are squeezing patients. Last month, a study by the Robert Wood Johnson Foundation was published. The results showed that:
- 11% of plans covered fewer than 10% of physicians in a plan’s region
- 30% of plans covered between 10%–25% of physicians in a plan’s region
- Only 11% of plans covered at least 60% of physicians in a plan’s region
As patients continue to migrate into the role of consumers, they must be vigilant when purchasing health insurance because plan type is not a good indicator of network size. This last study cited goes on to note that many patients “who selected narrow network plans largely on the basis of lower premiums were unaware of the network size of the plan they selected.” Many in the healthcare industry are getting flashbacks of the HMO plans from the 1990s that incited much criticism.
And where does this leave the providers? Politics aside, physicians are many times finding themselves in quite a pickle. Many providers have been working overtime to explain to patients upfront about the charges they may incur based upon the medical procedures and the patient’s health plan. Medical practices have hired financial counselors to explain these details to patients and set up payment plans. Some states, however, are taking a different approach. In April, New York enacted a law which essentially states that insurers and providers must resolve medical bills with patients via mediation.
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