Race to the Bottom
Within the ObamaCare exchange, that is:
To see the challenges awaiting some consumers, consider Woodland Hills-based insurer Health Net Inc.
Across Southern California the company has the lowest rates, with monthly premiums as much as $100 cheaper than the closest competitor in some cases. That will make it a popular choice among some of the 1.4 million Californians expected to purchase coverage in the state exchange next year.
But Health Net also has the fewest doctors, less than half what some other companies are offering in Southern California, according to a Times analysis of insurance data.
In Los Angeles County, for instance, Health Net customers in the state exchange would be limited to 2,316 primary-care doctors and specialists. That’s less than a third of the doctors Health Net offers to workers on employer plans. In San Diego, there are only 204 primary-care doctors to serve Health Net patients.
Other major insurers have pared their list of medical providers too, but not to Health Net’s degree. Statewide, Blue Shield of California says exchange customers will be restricted to about 50% of its regular physician network. (LA Times)
Surprise, surprise….
Should be interesting to see how this all plays out
“The doctor can’t see you now.”
How common is this response going to have to become before people start to take another look at our health care market?
It will be interesting to see how well this works. There’s certainly nothing wrong with narrow networks. However, rationing by waiting or favorable selection by excluding most specialists is not a good idea.
That’s so sad; hopefully there will be a countervailing influence before this gets ugly.
“In San Diego, there are only 204 primary-care doctors to serve Health Net patients.”
My word. San Diego is not a small city.
But is Health Net just an outlier? Looks like this article is indicating it is.
Maybe; but that’s beside the point. This should never be an issue in the modern US. How widespread the problem is hardly matters to the bottom line here, which is that it’s unacceptable.
The issue is price, including more physicians that wouldn’t agree to reduced reimbursement, would increase price. So either the physicians have to be forced to recieve less reimbursement or that $100 premium will be much much more.
What if health insurance was run by tech firms. Imagine your insurer explained that people who use medical care less frequently get preference in scheduling appointments.
I will be interested to see how this whole process plays out. We have been anticipating this for so long!
I wonder what kind of reactions we’ll start seeing if people can’t access doctors.
The real story will play out in October 2014. How many insurers will survive if their rates are inadequate. How many will re-enroll in a plan with a small network. Will the youngsters really sign up in numbers sufficient to support the old and infirm.
This year is just the teaser. Wait ’til next year.
This is not a scientific comment, but I sold health insurance for years and here is what I found:
– healthy people generally did not care about how wide their network was. Men in general did not care either, since they tend to postpone seeing any doctor until there is an emergency……..and when you are in an ambulance at the ski resort, all medical personnel kind of look the same.
– people with chronic illnesses wanted access to specialists and their own doctors, naturally.
I only bring this up to counter the impression that all of America will be angry at the narrow networks that come with cheap insurance. Many Americans will say thank goodness, my insurance got cheaper and I do not expect to use the insurance anyways.
Bob,
This is likely Health Net’s way of screening out the sickies. As you note, people who don’t go to the doctor much won’t care, but people who need a lot pf physician services will shun this plan. With the ban on underwriting, this is a clever way of doing the same thing.
There is a fine line between plan design that encourages enrollees to control unnecessary medical expenditures; and plan design that encourages favorable selection.
Let’s look at incentives from a different perspective:
Presumably some proportion of people (those who previous comments suggest do not care about # of network providers, perhaps) will primarily shop premium price. That may allow Health Net to increase the number of its enrollees such that Health Net will be able to advertise to & attract more network providers because they want a piece of the pie.
If a medical provider is restrained from increasing his revenues by raising treatment prices (restrained that is, by Health Net’s competitive prices), then the only way that medical provider can increase revenue is by joining the network and expanding the number of consumers he treats (which will also inevitably decrease the time spent with each patient, but oh well.)
Something like that could be what Health Net is betting on. It will be interesting to see how it all rolls out….
HealthNet reduced price by doing this and only including the most efficient, low cost providers. People have a choice, pay more and get more docs. Nothing wrong with that.
It would make sense if people were sure they had a choice about this. Then people could make the trade off between lower prices and fewer doctors; but since some will have this choice made for them by their employer it just doesn’t work.