Lower Health Insurance Premiums to Come at Cost of Fewer Choices

From the New York Times

Federal officials often say that health insurance will cost consumers less than expected under President Obama’s health care law. But they rarely mention one big reason: many insurers are significantly limiting the choices of doctors and hospitals available to consumers.

From California to Illinois to New Hampshire, and in many states in between, insurers are driving down premiums by restricting the number of providers who will treat patients in their new health plans.

When insurance marketplaces open on Oct. 1, most of those shopping for coverage will be low- and moderate-income people for whom price is paramount. To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers.

Some consumer advocates and health care providers are increasingly concerned. Decades of experience with Medicaid, the program for low-income people, show that having an insurance card does not guarantee access to specialists or other providers.

Consumers should be prepared for “much tighter, narrower networks” of doctors and hospitals, said Adam M. Linker, a health policy analyst at the North Carolina Justice Center, a statewide advocacy group.

“That can be positive for consumers if it holds down premiums and drives people to higher-quality providers,” Mr. Linker said. “But there is also a risk because, under some health plans, consumers can end up with astronomical costs if they go to providers outside the network.”

Insurers say that with a smaller array of doctors and hospitals, they can offer lower-cost policies and have more control over the quality of health care providers. They also say that having insurance with a limited network of providers is better than having no coverage at all.

Cigna illustrates the strategy of many insurers. It intends to participate next year in the insurance marketplaces, or exchanges, in Arizona, Colorado, Florida, Tennessee and Texas.

“The networks will be narrower than the networks typically offered to large groups of employees in the commercial market,” said Joseph Mondy, a spokesman for Cigna.

The current concerns echo some of the criticism that sank the Clinton administration’s plan for universal coverage in 1993-94. Republicans said the Clinton proposals threatened to limit patients’ options, their access to care and their choice of doctors.

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  1. John Barker on September 25, 2013 at 2:17 pm

    But, but Conservatives out there—-the market always offers more choices, not fewer!! Never mind that its Obamacare, Obamacare IS the Conservative version of universal healthcare and except for a quirk of history it would have been universal healthcare in this country long ago.

    • Eric Ganguly on September 30, 2013 at 12:44 pm

      How true. Obamacare is the conservative version of universal healthcare, but it will not last forever, single payer will eventually come, but when and how no one knows.

  2. Thomas Cox PhD RN on October 2, 2013 at 11:14 am

    Single payer isn’t “THE” needed solution.

    A single payer, insurance risk retaining insurer is “THE” needed solution.

    Medicare transfers insurance risks to health care providers – look up the “Medicare/Medicaid Prospective Payment Systems”.

    This means that Medicare, like managed care companies and traditional insurers are turning health care providers into their patients’ tiny, extraordinarily inefficient health insurers (See “Standard Errors: Our Failing Health Care Finance Systems And How To Fix Them” (www.standarderrors.org).

    As inefficient insurers health care providers tend to avoid high cost patients, delaying and denying medically necessary and appropriate care to their patients. They really do not have any choice because financial risk is very high for small insurers.

    So, merely making Medicare available for all won’t change the inefficient management of insurance risk. We will still be getting far less service per dollar than available when insurance risks are managed by a large, maximally efficient, national health insurer.

    • John Barker on October 4, 2013 at 2:33 pm

      I find talk about management of insurance risk with reference to health care to be preposterous. Insurance is something you buy to protect against some unlikely but still possible event. The insured seldom needs to use the insurance and the insurance company can make a profit. These circumstances are unreal when it comes to healthcare where there is a 100% chance that the insured will need to use the insurance and the risk for the insurance company is 100%. Everyone has health problems, its part of being human. Healthcare isn’t risk manageable and insurable, can you imagine what your home owner’s insurance would cost if the probability that your house would burn down was 100%. Canada and Europe understood this long ago.

  3. Chuck Platt on October 21, 2013 at 8:39 am

    Regarding the headline “Lower Health Insurance Premiums to Come at Cost of Fewer Choices,” I submit that in order to make any meaningful cost savings in the financing of health care in this country will require everyone to give up something. The main target of savings over the last forty plus years has been the medical doctors and hospitals in the form of reduced reimbursements. Not much has been done to reduce the cost associated with marketing and administering insurance, reduction of legal expenses through tort reform, reductions of administration expenses by limiting complicated multiple choices in insurance coverages, etc. All of these savings can best be achieved with a universal healthcare system. But these changes will be painful to the people affected.

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