Fwd: qotd: Stuck out-of-network and vulnerable

_______________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

-------- Original Message --------
Subject: qotd: Stuck out-of-network and vulnerable
Date: Tue, 18 Mar 2014 11:08:10 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Kaiser Health News
March 18, 2014
Warning: Opting Out Of Your Insurance Plan's Provider Network Is Risky
By Michelle Andrews

Many plans sold on the health insurance marketplaces offer a tradeoff:
lower premiums in exchange for limited networks of providers. But
consumers who opt for a narrow network plan with the idea that they'll
go out of network when necessary may be taking a big financial risk.

The health law generally places limits on how much consumers can be
required to pay out of pocket for medical care (not including premiums).
In 2014, the limit for an individual plan is $6,350 and for a family
plan, $12,700. But those limits apply only to care provided by doctors
and hospitals in a plan's provider network. There may be a separate
out-of-pocket maximum for services provided out of network in
marketplace plans, or no cap at all.

Similarly, the health law requires that preventive care such as
vaccines, cancer screenings and annual checkups be covered at no cost to
consumers in most health plans. If someone uses an out-of-network
provider, however, they can be charged.

Going out of network opens the door to higher costs in other ways as
well. Plans may require patients to pay a higher copayment or
coinsurance for an out-of-network provider. In addition, since the
doctors, hospitals and other providers are not under contract with the
insurance company, in many states those providers may bill patients for
any charges not covered by the insurance, a practice known as "balance
billing." The contracts signed by providers who join plan networks
generally contain provisions that prohibit them from balance billing
enrollees.

Plans sold on the marketplace are divided into four levels based on the
amount of consumer cost sharing required. On average, a bronze plan pays
for 60 percent of covered medical services, a silver plan pays for 70
percent, a gold plan, 80 percent, and a platinum plan, 90 percent. But
those percentages don't take any out-of-network care into account.

A McKinsey & Co. analysis of 120 silver-level exchange plans found that
70 percent were narrow network plans, in which at least 30 percent of
the area's largest hospitals are not in the plan, or ultra narrow
network plans, in which that number grows to at least 70 percent.

Narrow networks can be a particular problem in HMO-style plans that
don't cover any out-of-network care except for emergency services.
According to the analysis by Breakaway Policy Strategies, roughly a
third of mid-level silver plans are of this type, typically leaving
consumers on the hook for the entire bill if they get care from an
out-of-network provider.

The health law does provide protection for consumers when they receive
emergency care from a hospital that's not in their provider's network.
In such instances, health plans can't charge consumers higher
coinsurance or copayments.

However, patients placed on observation status or admitted to the
out-of-network hospital from the emergency department are no longer
shielded from higher out-of-pocket costs.

"Once the patient is stabilized, the patient will be responsible for
whatever the insurer doesn't pay for that observation or admittance,"
says Jeffrey Bettinger, an emergency physician who is chairman of the
reimbursement committee of the American College of Emergency Physicians.

Whichever type of plan they choose, the onus is on consumers to dig into
the details and make sure they understand what they're signing up for.
There's a tremendous amount of variability in exchange plans, even among
silver level plans, says Richard Smith, executive vice president at
Breakaway Policy Strategies.

"I don't see a lot of standardization," he says. "Consumers need to be
really cognizant. There are design features of these plans that
consumers need to be aware of."

http://www.kaiserhealthnews.org/Stories/2014/March/18/Michelle-Andrews-opting-out-insurer-provider-network-risky.aspx


Comment by Don McCanne

Most people who have been paying any attention at all are quite aware
that health plans inside and outside of the exchanges limit coverage to
physicians and hospitals within their contracted networks. Although some
plans may also offer limited coverage outside of the networks, it is
less clear as to the extent and adequacy of that coverage. This article
helps to clarify that issue by showing how muddled the coverage is.

Some of the traps include care provided outside of HMOs, care provided
after an emergency patient is stabilized, free preventive services that
may not be free outside of the network, services provided within network
that are not benefits of the specific plan selected, and so forth. What
is particularly treacherous is that, not only do you usually have to pay
in full for these services, but your payments may not apply to your
maximum out-of-pocket expenses, which can be unlimited out-of-network.
The ACA promise that out-of-pocket expenses will be capped for the year
($6,350 for an individual and $12,700 for a family) comes from the same
book of promises that gave us "you can keep your plan if you like it."
It is possible to end up with expenses over six figures. That is quite a
whack for the person who was trying to do the right thing by buying a
qualified insurance plan.

The precise out-of-network coverage depends on the specifications of the
plan selected, and there are very few standards with which the plans
must comply. So how do you select the right plan?

When people purchase their plans, they usually look first at the
premium. Then they look at the deductibles and then the copayments or
coinsurance. Usually, when assisted by a plan navigator or equivalent,
they will also look at the tax credits for the premiums and the
subsidies for cost sharing. Since many benefit from these they often
select a silver plan because that is the only tier that includes
cost-sharing subsidies.

The next step is to check the list of providers to see if your
physician(s) or hospital(s) are on the list. This is where it becomes
more tricky since those lists are often difficult to access, and they
can be quite unreliable. Even physicians can be confused since they may
be included on an insurer's plan outside of the exchanges, but excluded
from the exchange plans, and yet they may not be aware of the exclusion.

Finally, just try to find out the precise rules for coverage of care
obtained outside of the network. Since there are very few standards, it
is important to know this. The various insurers may approach such
charges quite differently. You could end up with only modest additional
expenses, but it is not too difficult imagining a six-figure bill when
you are admitted to an out-of-network hospital. The insurer may cover
the charges in the emergency room, but once the stabilized patient is
admitted, she may well be on her own for all additional charges.

Think of how administratively complex the private insurers have already
made our system. Then think of the administrative excesses that arise
just from handling the muddled out-of-network care. The insurers are
forcing upon us even more of their primary product - administrative
services - while evading the very purpose of health care coverage by not
paying for medical services that the patient needs.

If we had a single payer national health program with first dollar
coverage (like many other nations with much lower health care costs)
then this out-of-network nonsense would go away. What is really
perplexing is why haven't our people demanded this before now? Don't
facts matter?

In fairness, when we, as experts, think of how much effort we have to
put in just to understand these issues, it is no wonder the the insurers
and the rest of the medical-industrial complex have been so successful
in bamboozling the public at large. We can use the political process to
overcome this, but it would require a massive effort. After a couple of
decades of working on this, I don't see it happening. Prove me wrong.