Idaho health insurers are getting tough about patients sticking to their networks — the group of hospitals, doctors and clinics that come with certain insurance plans. Hundreds-of-thousands-of-dollars tough.
Most of the plans that go up for sale Nov. 1 on the Your Health Idaho insurance exchange will have much higher “out of network” costs than Idaho consumers have seen before. Insurers say the changes are less damaging than their alternative: dropping out of Idaho’s exchange altogether, as some insurers have done in other states.
Idaho’s top insurance regulator calls the changes “concerning and certainly somewhat problematic.” But they are legal.
“It’s become extremely important that consumers look very carefully at their plan — first to determine if their provider of choice is in-network, and if he or she is not, they should consider whether or not they should change plans,” said state Department of Insurance Director Dean Cameron. “And they should look very carefully at what that might mean to them financially.”
Starting next year for some Idahoans, going to a doctor or having surgery in a hospital without first checking whether they are “in network” could result in a surprise six-figure bill.
What’s a deductible? What does ‘network’ mean? Get definitions at www.healthcare.gov/glossary
Blue Cross of Idaho plans will have a $50,000 out-of-network deductible for individuals, and patients will have an out-of-pocket responsibility for up to $75,000 of all out-of-network claims — up from $4,000 and $10,000 this year.
BridgeSpan and SelectHealth members will have less-extreme deductibles, but they will be responsible for up to $200,000 of their bills if they go out of network.
The amounts are doubled for families.
It could have been worse, Cameron said.
When the five insurers who do business on Idaho’s exchange filed their plans with the Idaho Department of Insurance for review earlier this year, two proposed an “unlimited” maximum out-of-pocket cost — so that a patient who signed up, say, for a St. Luke’s-centric plan could have to pay $1 million if he or she opted for cancer treatment from doctors at Saint Alphonsus.
One of those two insurers also wanted to shift onto the patient a larger share of costs — going from a 50/50 split on the cost of care, to the insurer covering only 10 percent.
The drastic spike is in line with a national trend. Nearly half of “silver” plans — the most popular type of plans — that entered markets in 2016 required patients to cover an unlimited share of out-of-network costs, according to an analysis by the Robert Wood Johnson Foundation.
The department has almost no power in Idaho law to regulate what insurers charge, what benefits they offer and how many doctors they include in their networks.
What Cameron does have is authority to review health insurers’ plans. “We just argue with them, for lack of a better word,” he said. The insurers came back with six-figure maximums, which he considers “still outrageous.”
Yet Cameron says insurers are not raising their charges in a vacuum. Numerous circumstances got Idaho to this point, he said.
“From a philosophical perspective, it is also extremely difficult, the position they are in, where they have all essentially lost money these last three years in the individual [exchange] marketplace,” he said. “They are all in extreme pressure, some of them financial pressure, to fix that situation.
“And as a regulator, I want to have as many carriers in the marketplace as possible. I look at surrounding states [such as Washington and Montana] that are down to one or two carriers. ... So the Hobson’s choice that I have is: Is the consumer benefited if I force the carrier out of business or force them to decide not to play in the marketplace because I don’t accept their rates or their product changes?”
Our laws ... haven’t even kept up with the changes in the marketplace.
Dean Cameron, Idaho Department of Insurance director
Cameron believes the shift of costs onto patients — and the suddenly strict adherence to networks — is “a consequence of a consequence of a consequence of some of the provisions in the Affordable Care Act.”
IT COMES DOWN TO MONEY
One factor is the trouble some insurance companies have faced in the health insurance exchange market.
Federal programs that helped insurers weather unexpected high claims from the ACA are no longer being funded. At the same time, insurers can no longer deny coverage or charge people high premiums because they have histories of expensive health conditions. Premiums the Idaho insurance companies collected in the past three years have been inadequate to cover those claims, Cameron said.
BridgeSpan executives said they took a cautious approach to entering the new Affordable Care Act market and, as a result, have made less extreme changes to adapt to losses than have other insurers.
Idaho insurers will raise their 2017 rates by an average of 24 percent statewide. Customers who qualify for tax credits under the Affordable Care Act are likely to have to pay only a portion of that increase.
Another factor, Cameron said, is the consolidation of health care. As larger hospitals, medical suppliers, dialysis providers and other organizations take over smaller ones, there is less competition when a health insurance company tries to leverage a deep discount for its members.
“Many of the [health care] providers are only willing to sign reduced reimbursement contracts in return for exclusivity,” he said. “In other words, a hospital might say, ‘We will only sign this contract with you if all of your members are [assigned to us], and you will not reimburse an out-of-network benefit.’ ... The provider community is in power in the negotiation position, and this is something they’re demanding.”
CHANGING THE BUSINESS?
Blue Cross and SelectHealth executives cite a different reason for their out-of-network spike: a universal shift underway in how we pay for health care.
“All over the country, a lot of carriers are pulling out of counties or pulling completely out of the market, so we certainly had to ask ourselves the question of how to be sustainable,” said Peter Sorensen, who heads the individual health-insurance market for Blue Cross of Idaho.
When he looked at places where insurers are thriving, the common thread was a “population health” model — something most people would recognize as the tight-knit health organizations known as HMOs, which require patients to see only providers in the organization.
It’s not a gotcha. It’s something that is really designed to create better care.
Jerry Edgington, VP, SelectHealth in Idaho
If patients go only to a certain set of hospitals, laboratories, medical suppliers, pharmacies and doctors, it is easier for a health insurance company to track the patients’ outcomes and eventually to move to a payment system that rewards providers for taking better care of patients and keeping the population healthy, as opposed to simply paying out claims.
The problem, Sorensen said, is that Idaho law requires insurers to provide some out-of-network benefits. Raising out-of-network patient costs is a creative way to get around that legal barrier — corralling patients into the same kind of tight-knit structure that makes up a “true HMO or true managed care” plan, he said.
The question is whether the HMO-like plans will attract enough people to succeed. Sorensen said 5,000 or 10,000 people need to be part of each “population” to make the plans work. At that level, for example, an insurer can start to pinpoint when a health system is consistently performing more orthopedic surgeries than the national average.
You want people to spend at least as much time considering what they will do for health care as they do when they are shopping for a phone.
Jamee Wright, spokeswoman for SelectHealth
SelectHealth has been working on that kind of model with St. Luke’s for a few years.
But what if a patient doesn’t have access to an in-network doctor or hospital? Those problems are rare and can be dealt with case by case, insurance executives said.
Insurers cover emergency and urgent care services as though they are in network, such as when a patient gets into a car crash during a vacation out of state.
“I don’t think there is any case anywhere in Idaho where we wouldn’t have at least primary care available,” said Jerry Edgington, vice president and general manager of SelectHealth in Idaho. “We work with the plan member and their doctor and their particular medical condition to make sure they have reasonable access.
REGULATION ON CHANGES?
A small share of the plans sold on Idaho’s exchange for 2017 have an open network, where patients can see almost anyone they want — doctors at both St. Luke’s and Saint Alphonsus health systems, for example.
BridgeSpan, the sister company of Regence BlueShield of Idaho, will have a broad statewide network for its 2017 plans. Executives say that is because BridgeSpan built its “managed care” model differently — with the “manager” being independent primary-care providers, not a network built by a single hospital system.
But the largest number of plans are regional or built around a local health system or other networks, such as one created by the Independent Doctors of Idaho, an association formed in 2013 to provide an alternative to the takeover of Treasure Valley medical practices by the St. Luke’s and Saint Alphonsus health systems.
Cameron is concerned that people will buy plans based on their monthly premiums or passively allow their insurers to sign them up for new plans whose networks do not include their family doctors and preferred specialists. He worries that networks keep getting narrower.
Studies have found that “surprise” out-of-network bills are far from rare. The industry magazine Modern Healthcare reported a 2015 study by Consumers Union found that “surprise medical bills hit 30 percent of privately insured Americans, and a quarter of those patients said the bill came from a doctor they did not expect. A survey published in June 2013 said 40 percent of people “who went to out-of-network physicians did so involuntarily,” the magazine reported.
Cameron said he hopes the Legislature will give him more authority. The Department of Insurance has been working for six months on legislation to give the state more oversight of “network adequacy” — making sure insurance networks include enough primary-care providers to meet the needs of patients who live in rural North Idaho, for example.
If the Legislature does not address insurance-network regulation soon, it may lose the privilege, Cameron said.
“It’s complicated and controversial enough that both sides dislike it,” he said, referring to insurers and health-care providers, “But we know that we need to pass something, or the federal government will interject there.”
Per-person costs under 2017 narrow-network silver plans in the Treasure Valley:
Blue Cross of Idaho Silver 4000
BridgeSpan Silver Essential 4000
Mountain Health COOP Silver LINK
PacificSource Silver HSA 3000
SelectHealth Silver 3800
What does it mean?
Coinsurance: The percentage of costs of a covered health care service you pay (20 percent, for example) after you’ve paid your deductible.
Copay: A fixed amount ($20, for example) you pay for a covered health care service after you’ve paid your deductible.
Deductible: The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, you pay the first $2,000 of covered services yourself.
Network: The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services.
Out-of-pocket maximum/limit: The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments and coinsurance, your health plan pays 100 percent of the costs of covered benefits. The out-of-pocket limit does not include your monthly premiums.
Definitions from healthcare.gov/glossary