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Health Insurance & Affordable Care Act

Some Insurance Plans Cut Doctor, Hospital Choices

WebMD News from Kaiser Health News

By Pauline Bartolone, Capital Public Radio

Wed, Dec 4 2013

MILL VALLEY, CALIFORNIA – When Diane Shore got a letter that her health policy would be canceled, the small premium increase for a new plan didn’t bother her that much. What she’s really troubled by is: “My physicians will no longer be in this network of physicians, or the hospitals won’t be as well.”

Sixty-two year old Shore owned an IT consulting business in the San Francisco Bay Area, and retired when she sold her business in 2000. She says she wants to stick with the providers that she’s had for years, including the surgeon who operated on her for breast cancer in 1998.

“I have full confidence in her,” she says. “And my primary care doctor has been my primary care doctor for 20 years.”

In Shore’s case, the problem is that the Blue Shield of California plan being offered limits her choice of doctors and hospitals just to Marin County, where she lives, just north of San Francisco. But, she says, “All my doctors are in San Francisco. I live 20 minutes from San Francisco. In fact, it’s more convenient for me to go to San Francisco than to the hospital here in Marin County.”

Shore’s experience doesn’t surprise San Francisco-based insurance broker Susan Shargel, who’s trying to sort out all the new ways insurers are contracting with doctors. Some health plans will have fewer doctors and hospitals. Blue Shield, for example, says it will have half the doctors and three quarters of the hospitals next year as they have this year in the individual market.

Shargel thinks that the changes are not clear in the cancellation letters. “There isn’t something that says: ‘Alert. Be aware. Take action now to be sure this works for you or to be sure you know what’s happening.’ There needs to be a red alert,” she says.

The health plan offered to Shore was a Blue Shield of California EPO plan. EPO stands for “exclusive provider organization.” The company says it is offering these lower-cost plans for the first time next year to buyers on the individual market. Other insurers are offering similar plans.  

Patrick Johnston, president of the California Association of Health Plans, notes that the federal Affordable Care Act requires more benefits than most insurance plans have provided up until now. That includes free preventive care, a limit on annual out-of-pocket spending and a ban on lifetime “caps” for medical expenses. So, to keep health plans affordable for buyers on the individual market, one of the few cost variables to work with is doctor contracts. 

“In areas where there are a lot of hospitals, some more expensive than others, and a lot of doctors, it’s only natural that a health plan will sign up some, but maybe not all,” he says.

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