Where You Live Determines Health Insurance Costs
In Philadelphia, by contrast, there are many hospitals and each has market clout.
“They can resist any effort to cut them out of a network or to bargain,”because insurers believe they must have every hospital in their network or risk losing customers, Pauly said.
Nationally, some of the lower-cost plans are likely to have narrower networks of doctors and hospitals, said Robert Laszewski, a former insurance executive who is now an Alexandria, Va.-based consultant.
“One of the only ways they can vary the price is by their networks,” he said.
That’s because, starting Jan. 1, the law bars insurers from rejecting applicants based on their health, or from charging the sick more than the healthy. They can, however, vary premiums based on age, whether the applicant smokes and where they live.
Because the government data released this week does not name insurers - nor give information on the size of the plans’ doctor and hospital networks - it is difficult to tell whether lower cost plans do indeed have smaller networks. Some consumer groups fear patients may not have access to a wide enough range of doctors or hospitals in some plans and may have to pay more to see an out-of-network specialist as a result.
Ario says there are good small networks and bad ones. The bad ones are those where insurers simply lop off half their providers based solely on price. The good ones create an integrated network with high quality hospitals and doctors.
“The idea that all narrow networks are designed to focus only on price and produce less choice for consumers is not true,” he said. “Some of the best quality insurers now are integrated systems, which tend to have narrow networks.”
Experts say the impact of price variations on enrollment is hard to predict.
“That’s the question we’re all asking ourselves,” said Michael Campbell, director of the Interdisciplinary Health Law Clinic at Villanova University School of law, just outside Philadelphia. “But I don’t see people hopping on the bus and relocating to Pittsburgh” to get a better rate.”
Sun, Sep 29 2013