Since the political conversation about the Affordable Care Act has focused on the validity of President Obama’s promise that Americans will be able to keep their existing health care plans, opponents of the law have begun advancing another related argument against reform: if you like the doctor or hospital you have, you may not be able to keep them.
These critics claims that Americans receiving cancellation notices about their individual health care plans will be surprised to learn that the options available to them in the law’s new marketplaces offer narrower networks of providers. And in some state exchanges, insurers are even failing to display which doctors accept which insurance plans or contain “inaccurate or misleading information” about doctors’ “specialties, addresses and language skills.”
“You’ve got middle-class people deciding to buy Plan A instead of Plan B because the former’s a bit more affordable and meanwhile, unbeknownst to them, the fine print says that Plan A includes far fewer providers than Plan B does,” one conservative blog declared. “If you think the media’s been tough on O-Care lately, wait until January when ‘rate shock’ segues into ‘provider shock.’”
But the latter attack would be just about as inaccurate as the former. Since 15 million people or just 5 percent of the population purchases health insurance policies on the individual market and more than 80 percent don’t stay on the same plan for more than two years in a row, the individuals who will be affected by “provider shock” were changing providers almost every year before reform.
Insurers have long relied on limited or tiered networks of providers to control costs and many of the companies participating in the exchanges reduced their premiums by encouraging some providers to lower the rates they usually charge commercial plans. Under the arrangement, the insurer can attract more enrollees, while the chosen hospital fills more beds. The choice of health-care providers is narrowed, though nothing in the law prevents patients from seeing providers outside of the networks and paying more for their care. Still, the overwhelming majority will gravitate towards the lower-cost policies. And that could actually help improve the health care system.
Remember that while the Affordable Care Act does establish some network adequacy standards — insurers are required to ensure a sufficient choice of providers (including providers that specialize in mental health and substance abuse services) and offer essential community providers to serve predominately low-income and medically underserved populations — most of the rules are relegated to the states. They’re responsible for establishing and updating rules for network adequacy standards and will need to consider whether to apply the same network standards to the market outside of the exchanges.
Big provider networks aren’t necessarily better, however. Industry surveys show that premiums are “the most important factor in consumers’ choices” and that more than half of those surveyed would opt for “a narrow-network product if it cost them at least 10 percent less than an equivalent with broader choice.” That was certainly the experience in Massachusetts, where a 2010 law actually required health plans to offer tiered-or limited-network products “priced 12 percent below their broad network product.” Three years later, a state’s attorney general report found that membership in these limited networks grew by almost 50 percent.
Narrow networks, insurers’ refusal to pay for services rendered, and utilization review harken back to the HMO era of the 1990s. Critics will seize on this narrative because it echoes the attacks that successfully sunk President Bill Clinton’s effort to reform the health care system 20 years ago. But this is a wholly different approach to controlling health care costs. If insurers offer adequate provider networks, but select only the most efficient and highest quality hospitals and doctors to provide the 10 essential categories of health care benefits, they would keep costs low while keeping patients healthier.
In that way, even if you don’t want to pay out-of-network costs to keep the doctor you already have, you may find an even better alternative in your new plan.