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Limitations Of New Health Plans Rankle Some Enrollees

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“Obamacare products have lower prices than they would have if they had had [larger] commercial networks,” said Robert Laszewski, an industry consultant and former insurance executive. “They’re one-size-fits-all networks designed for low-income people accessing insurance for the first time.”

Lower Prices, Limited Choice

Lower monthly premiums made such plans attractive to many consumers on the new exchanges. Some chose tightly managed plans -- often called health maintenance organizations (HMOS) or exclusive provider organizations (EPOS) – specifically because of their cost, in some cases, without realizing the tradeoffs.

Others had no choice.

Anthem, one of the biggest sellers of individual insurance, offers only HMO-like plans through the new markets in six of the 14 states it serves, including New Hampshire, where it is the only insurer. In California, where the insurer is the target of two class-action lawsuits, it offers plans with no out-of-network benefits in Los Angeles, San Diego and San Francisco, although another type of plan is available in other counties.

Anthem spokeswoman Kristin Binns said the insurer decided to move heavily into managed care in many of its markets after research showed most consumers, especially those who were uninsured, cared about price first and foremost.

“HMOs give them much more access than they were afforded before,” Binns said.

Still, she said Anthem expects to roll out plans with out-of-network coverage in 2015 in some areas where it does not offer them. She would not specify the regions.

Other insurers made similar decisions, offering managed care plans as the only choice for residents buying through the new marketplaces in entire counties in Indiana, Georgia, South Carolina, Virginia, Florida, Wisconsin and Mississippi, according to government data analyzed by Kaiser Health News. Nationally, 43 percent of mid-level “silver” plans offered in California, New York and 34 states using the federal marketplace have no coverage outside their networks, a study by the American Cancer Society Cancer Action Network found.

“They’re all doing it,” says Wall Street analyst Ana Gupte of Leerink Swann, an investment bank. “Obamacare is putting pressure on their margins, so they’re on the hook to moderate costs.”

Fri, Jul 25 2014

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