NEW PLANS AND HEALTH CARE EXCHANGES
PREMISE: Health reform was meant to broaden Americans' access to health insurance plans by giving us more choices. The law promised that state-based health exchanges would foster competition by providing consumers with more information, more options, and plans with better coverage. The plans available in the exchanges are supposed to be good products that will attract consumers with affordable (sometimes subsidized) prices and desirable levels of coverage.
HOW IT'S WORKING: There are concerns that providers won’t accept these new plans, leaving new enrollees with difficult access to care. Did you know?
- The new plans often offer very limited selections in terms of doctors: According to a study from consulting group McKinsey and Company, approximately 70 percent of plans offered in the exchanges are “narrow network” or “ultra-narrow network” plans. As a comparison, only 23 percent of large group plans (which are not yet subject to the law's mandates) offered narrow networks in 2013. Narrow networks mean that people on those plans have a more limited selection of doctors to choose from. Sometimes it also means there are too many patients in a given health plan than there are doctors available to treat everyone, resulting in longer wait times for requested visits. (Washington Post)
- Doctors are expressing concerns about their ability to dedicate time and resources to caring for patients who enroll through the exchange plans, where reimbursements rates to doctors are likely to be much lower than those they receive from patients with other private insurance. In one survey, 40 percent of doctors answered that they would not accept the exchange plans. (Kaiser)
- Blue Shield of California offered doctors rates for the exchange plans that are 30 percent lower than normal commercial rates, leading many doctors to turn down the contracts. (Wall Street Journal)
- Although the new, compliant plans promise coverage for pediatric dentistry, contraceptive care and behavioral health, there is no requirement that the plans offered under the health law provide access to cancer care at top-notch cancer facilities (NBC News). In fact, many of the law’s cost-saving mechanisms are aimed at limiting access to expensive cancer drugs. (Forbes)
- In New York City, prominent hospitals like Memorial Sloan-Kettering Cancer Center - one of the world's largest cancer hospitals - is not accessible for many cancer paitents. (NPR)
The exchanges are actually resulting in fewer choices for consumers and fueling market consolidation in health insurance. Did you know?
- A report from the Government Accountability Office shows that in 40 states, the largest insurers either maintained or boosted their market shares as a result of the health reform. In 2012, consumers seeking individual plans could choose from - on average - 36 different insurance companies. In 2014, that number was down to three, a decrease of about 90 percent, showing incredible market consolidation as small insurers have been devastated. (GAO report)
- In 2017, 17 percent of Americans eligible for an exchange plan may have just one insurer to choose from. (The New York Times)
The plans in the exchanges offer subsidies and tax credits to enrollees whose family incomes are below 400 percent of the federal poverty level. But many Americans have found that plans in the exchanges are more expensive than their other coverage options and come with high out-of-pocket costs. Did you know?
- In the new plan with the lowest premium, called a Bronze plan, the average individual deductible for 2017 is $6,092. For a family plan, the deductible is over $12,000. These deductibles are much higher – more than 40 percent higher – than what was typically available in the individual market before the health reform (Health Pocket Study).
- When it comes to premiums, even many people below the subsidy threshold will be worse off. Because of the steep premium increases that many families and individuals will face (in order to buy more comprehensive plans that meet the ACA’s regulatory requirements), only those who earn 40 percent below the median income (about 225 percent of the federal poverty level) will qualify for a subsidy large enough to offset their premium increase on average. (Manhattan Institute)
- People who earn above 400 percent of the federal poverty level are not protected by subsidies or tax credits, meaning they must bear the costs of continuously increasing premiums without any assistance.
- Premium rate increases for individual plans purchased on the ACA exchanges being requested by health insurance carriers nationwide for 2017 average 25%. (ACAsignups.net)
- Many people with employer plans are facing higher premiums, but their increases are not nearly as high as those who get insurance in the exchanges. On average, health insurance premiums for the public exchange plan are projected to increase by at least 10% in 2017, while estimates from large employers have premiums increasing by about 5%. (Fortune).
Most Americans will have fewer choices, since the law's state-based exchanges will work as regulatory bodies, not marketplaces. While the exchanges are required to provide comparative information about plans, their main role is to regulate insurance plans and enforce mandates on individuals. According to the law (in Section 1311), the exchanges must:
- Make available only "qualified health plans" for purchase;
- Provide a toll-free telephone hotline and a Web site which will offer “standardized comparative information” on health plans, and an electronic calculator for people to determine the cost of their coverage;
- Assign each plan in the exchange a rating “in accordance with the criteria developed by the Secretary” of HHS;
- Inform people of eligibility for Medicaid, CHIP, or any State or local public program and help enroll people who are eligible;
- Grant certifications to certain people who are exempt from the law’s individual mandate; and,
- Establish the Navigator program.
Exchanges must provide the following information to the Treasury Department:
- A list of those exempted from the mandate, along with their tax information;
- A list of people eligible for a tax credit in the exchange because their employers didn’t provide adequate or affordable offers of health coverage;
- A list of people who have notified the exchange that they’ve changed employers; and,
- A list of people who have ceased their health insurance coverage and the date of their cessation.
And the exchanges may go even further. A New England Journal of Medicine article outlined the future of the health exchanges:
- States may bar the sale of insurance to individuals and small businesses outside the exchanges, as Vermont and Washington, D.C., have already done, or require that the same plans be sold inside and outside the exchange.
- Exchanges could advertise information on the quantity, quality, and prices charged by hospitals, doctors, and other providers and bar plans that do not meet their standards.
- States can require plans to offer incentives for people to use high-quality, low-cost health care services and providers. They also could require providers to apply research findings from analyses of “comparative effectiveness.”