Fwd: qotd: Buying platinum and getting bronze

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-------- Original Message --------
Subject: qotd: Buying platinum and getting bronze
Date: Fri, 21 Mar 2014 12:08:43 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Bloomberg Businessweek
March 20, 2014
Obamacare Limits Choices Under Some Plans
By John Tozzi

Ben Rosenthal was treated for prostate cancer four years ago and had
gallbladder surgery the year before that. A former manager at a
market-research firm in Los Angeles, Rosenthal, 57, paid for his own
health insurance. Last fall, when his plan was discontinued because it
didn't meet standards set by the Affordable Care Act, Rosenthal bought
the best insurance coverage he could find, a top-tier "platinum" policy
from Blue Shield of California that costs $792 a month. He figured it
would provide access to top hospitals. Then in February he learned the
plan wouldn't cover the hospitals where he was used to being treated.

Rosenthal is one of millions of Americans who have purchased insurance
under the Affordable Care Act and are discovering that many of the new
plans offer a narrow network of doctors and facilities. "If I had
anything happen, I wouldn't want to go to a hospital that I'm not
familiar with and with doctors I don't know," he says.

Since the ACA created marketplaces for private health plans last fall,
insurers expecting to lure customers with low premiums have fashioned
smaller networks of medical providers. By cutting out expensive
hospitals and negotiating favorable rates with doctors in exchange for
sending more patients their way, insurers can keep premiums down. Blue
Shield's new network includes 43 hospitals in Los Angeles County, about
64 percent of what its standard coverage offers, spokeswoman Lindy
Wagner says in an e-mail.

In addition to having fewer options, buyers are making decisions about
which plans to buy based on incomplete or misleading information, says
Karen Pollitz, senior fellow at the Kaiser Family Foundation, a health
policy research group. "Consumers have a very limited ability to shop in
advance and evaluate provider networks," she says.

Plans on healthcare.gov <http://healthcare.gov> and state marketplaces
are required to include links to directories that show which providers
accept the insurance. But the information is often missing, wrong, or
difficult to navigate, says Oliver Kharraz, chief operating officer of
ZocDoc, an online appointment booking company. ZocDoc tried to verify
the accuracy of hundreds of directories by calling doctors listed as
in-network providers. About half the listings were wrong, Kharraz says.
The California exchange, one of 15 state marketplaces that operate
independently of healthcare.gov <http://healthcare.gov>, created a
central directory on its website but took it down on Feb. 6 because of
errors.

Pressures on insurers to keep premiums low—state regulators can reject
plans that are priced too high—may mean patients will have to learn to
live with restricted choices. "The industry's had to find ways to cut
costs," says Hasday of Frenkel Benefits. The result, he says, is "much
less transparent for the consumer."

Reader comment:

John Alexander
I had the exact same problem as Mr. Rosenthal only in Florida with Blue
Cross Blue Shield. Got screwed, as I also picked the Platinum plan and
found out my hospital and doctors were not covered. The best research I
did before hand indicated I would be covered and found after the fact I
was not. Got furious with BCBS and they agreed to correct a few cost
items with my doctors. They are playing dollar games with our health and
I am completely frustrated. I am not upset with Obama-Care, only with
the sligh and sneaky Insurance companies. Cannot drop my insurance
and/or change until November of this year. What a fiasco. A singly payer
system would correct all of this smoke and mirror games played by the
Insurance industry.

http://www.businessweek.com/articles/2014-03-20/obamacare-limits-choices-under-some-plans

****

The American Enterprise Institute (AEI)
January 24, 2014
In Obamacare, go for bronze health plans. For most people, buying up to
gold or platinum plans is a waste of money
By Scott Gottlieb

We analyzed dozens of Obamacare plans, and found one striking result.
The networks of providers, and in many cases the drug formularies, are
the same whether you're buying a particular insurer's bronze plan, or
purchasing the same insurance option in a gold or platinum offering. My
American Enterprise Institute colleague Kelly Funderburk and I posted
some of our data here.

The bottom line is this. When you're choosing a particular insurance
offering, you typically can't trade up to a better benefit by buying the
gold or platinum variety of that plan. It's usually the exact same
benefit regardless of the metal you choose.

So what varies between these different metal plans? Typically, just the
co-pay structure and deductibles. As you pay higher premiums for a gold
or platinum plan, your deductibles and co-pays will decline. The insurer
will typically cover 60 percent of expected medical expenses in a bronze
plan, 80 percent in a gold plan and 90 percent in a platinum plan. So,
by buying the costlier plans, all you're doing is fronting a higher
premium to buy down your anticipated out of pocket costs. You're not
getting a better network of doctors or a better formulary of drugs.

http://www.aei.org/article/health/in-obamacare-go-for-bronze-health-plans-for-most-people-buying-up-to-gold-or-platinum-plans-is-a-waste-of-money/

Data to support this claim:
http://www.scribd.com/doc/201871033/Comparison-of-Bronze-Versus-Platinum-Obamacare-Plans

****

McKinsey & Company
December 14, 2013
Hospital networks: Configurations on the exchanges and their impact on
premiums

Narrow and ultra-narrow hospital networks are more prevalent (70 percent
of all networks), increasing the variety of network configurations
available to consumers

Broader network offerings are fewer than in 2013, yet remain available
in almost every rating area we analyzed. The prevalence of narrower
networks varies across markets, with the average percent contraction of
incumbents' network breadth between 2013 individual market networks and
2014 individual exchange networks ranging from 11 to 60 percent.

Products with broad hospital networks reveal higher premiums, with a
median premium increase of 26 percent between broad and narrower
networks of the same carrier, product type (e.g., HMO, PPO), metal tier,
and rating area. Also, the majority (84 percent) of lowest-price silver
products utilizes narrow or ultra-narrow networks

Across silver tier networks in our 20 analyzed rating areas, 58 percent
of the lowest-price products utilize ultra-narrow networks and another
26 percent utilize narrow networks. Network breadth appears to be
positively correlated with premium levels in many cases, but the use of
narrower networks is common at all price points.

http://www.mckinsey.com/client_service/healthcare_systems_and_services/latest_thinking

****

Remapping Debate
October 30, 2013
Out-of-network coverage in New York? We left it up to the insurers
By Craig Gurian

New York's health insurance exchange (called "NY State of Health")
offers individuals and families numerous insurance plan options at
various "metal" levels. What it doesn't offer in most parts of the state
are plans that provide coverage for non-emergency out-of-network care.
In a sample Manhattan zip code, for example, there are 62 plans
available at all metal levels. Not one of those plans pays for
out-of-network care.

Why then did New York State not require out-of-network coverage? "We
left it up to the insurers," said (Department of Health's Randi)
Imbriaco, and the insurers, she continued, arguing that "a closed
network helps keeps costs low," chose not to provide out-of-network
coverage in most of New York State, including New York City (some plans
in the western part of New York State do offer such coverage).

Dr. Andrew D. Coates is an internist based in upstate New York who is
president of Physicians for a National Health Program (PNHP), an
organization that advocates for a single-payer health insurance system.
Coates, who was speaking during the interview for himself and not as a
representative of PNHP, agreed with the idea that the lack of
out-of-network options would enhance the ability of insurance companies
to engage in cost cutting, regardless of whether patients were harmed,
as, for example, in a push for doctors to see more and more patients
each day.

He thought that doctors were increasingly being put in an "ethical bind"
where their medical instincts might tell them in a particular instance
to recommend an out-of-network physician — the "one oncologist that you
can think of that should really evaluate what to do next" in the case of
a rare cancer — even as they knew that following that recommendation
would be financially ruinous for the patient.

More broadly, in Coates' view, the greater empowerment of insurance
companies was accelerating a turn towards "a corporate medical model
that threatens to squeeze the humanity out of our interaction with our
patients."

http://www.remappingdebate.org/article/out-network-coverage-new-york-we-left-it-insurers

****


Comment by Don McCanne

According to the Bloomberg Businessweek report, Ben Rosenthal and reader
John Alexander purchased the highest tier plans available - platinum
plans - to ensure that they would have coverage for their current
physicians and hospitals. No way. Insurers have pushed the perversity of
narrow network plans all the way to the top.

Before Barack Obama was even nominated, the Democratic strategists had
already decided that "Choice" would be a campaign slogan to market
health care reform. Some of us protested that Celinda Lake and Herndon
Alliance were pushing "choice of private health plans" when what the
Democrats should have been advocating was "choice of physicians and
hospitals." It is clear which faction won this debate, as single payer
supporters had the door slammed on them.

But look at the consequences. We were promised that we would have our
choice of any plan we wanted with benefits as rich as desired, and with
a selection of any health care providers we preferred. We could choose
our doctors and our hospitals. But what happened?

So they did set up four levels of plans that we could choose from, plus
a fifth catastrophic plan as an option for younger individuals. So we
could buy a cheap bronze plan that would cover an average of 60 percent
of our health care costs, 70 percent for silver, 80 percent for gold,
all the way up to an expensive platinum plan that would cover 90 percent
of costs. But there would be only negligible differences in the benefits
since all plans had to cover the same ten categories of benefits, though
some variation within each category is allowed as long as it had the
same actuarial value.

But the shocker is the networks that the insurers established. As the
AEI report indicates, for plans offered by the same insurer in the same
market, the provider networks were just as limited for the high end
platinum plans as they were for the cheapest bronze plans. If you want
your medical bills paid, you do not have a choice of physicians and
hospitals. You have to stay in network. Typically seventy percent of the
providers are outside of the narrow network plans offered through the
exchanges.

The Remapping Debate report reveals a further complication. Previously
plans were available that provided reduced payments for care obtained
out of network, with the patient paying a greater share of the costs.
Now in areas such as New York City, none of these plans are available
through the exchanges. You must stay in network or pay the full bill.

According to the McKinsey report, in some markets plans are available
with broader networks, but these are less prevalent and declining in
availability, and they are exorbitantly expensive. They will likely be
subject to the death spiral since most markets do not have enough super
wealthy individuals to maintain a vibrant market of broad network plans.
The super wealthy then will simply pay their own bills.

So the Democrats traded off our choice of physicians and hospitals for a
choice of deductibles and copayments, as the insurers took away the
choices that we actually wanted. The narrow and ultra-narrow networks
were a decision of the insurers, not us. We are getting what they want
rather than what we want, simply because the Affordable care Act was
designed to leave the insurers in charge.

As we've said before, all of this would go away if only we would enact a
single payer national health program. As PNHP president Andy Coates
says, physicians are placed in an "ethical bind" as they practice under
"a corporate medical model that threatens to squeeze the humanity out of
our interaction with our patients."