“Shrinkage” in ACA health plans narrows provider networks

A little boy’s love of monkey bars recently became a test for his health insurance plan’s network of providers.

Dr. Ramiro Gumuccio, 50, the boy’s father and an anesthesiologist in Chicago, says the plan failed that test. Gumuccio’s seven-year-old son spent so much time in the monkey cages that in September his hand developed an angry blister. The wound developed a severe, antibiotic-resistant infection, Gumuccio says, and he had to take the boy, severely ill and vomiting, to the hospital. But he couldn’t go to the top children’s hospitals in Chicago that are close to his home, he says, because those facilities don’t accept the Blue Cross Blue Shield health plan he purchased through the Affordable Care Act marketplace. Instead, he had to go to another hospital about an hour away, where the staff seemed ill-equipped to handle a pediatric emergency, he says.

Although the boy recovered physically from the incident, Gumuccio says, more frustration followed when he tried to find a psychological test for his son, who has autism. His health plan’s website, he says, showed him many mental health providers in remote parts of Wisconsin and Indiana, and he couldn’t find an appointment with local providers.

Gumucio thought she was choosing higher-end coverage when she enrolled in the Preferred Provider Organization (PPO) plan. Compared to health maintenance organizations (HMOs), PPOs often have higher premiums but generally pose fewer barriers for enrollees in accessing providers. But in his experience, Gumuccio says, “you pay more for less.”

As open enrollment for the Affordable Care Act’s marketplace health plans begins this week, consumers face a daunting, high-stakes challenge: finding an affordable plan that includes a network of providers likely to meet their health care needs. There are signs of “shrinkage” in marketplace health plans as insurers adjust provider networks to control utilization and costs, Karen Politz, a senior fellow at the Kaiser Family Foundation, wrote in a report earlier this year. An analysis of the 2020 plan market by consulting firm Avalere found that plan networks are the most restrictive since 2014 — a change the firm attributes to insurers’ efforts to cap premiums — as 78 percent of plans sold through HealthCare .gov, offer limited or no coverage outside of their network. “Narrowing networks is one of the main tools that insurers have used to figure out how to make money from marketplace plans,” Politz told MarketWatch.

Blue Cross and Blue Shield of Illinois, Gumucio’s insurer, said in a statement that it could not comment on his specific concerns due to privacy concerns, but that it was “committed to providing members with access to quality, cost-effective health care with the terms of their coverage of benefits,” adding that it has “some of the largest provider networks in Illinois.”

The federal government sets time and distance standards

After years of leaving the matter up to the states, the federal government is resuming some oversight of provider networks in 2023 plans sold through HealthCare.gov. The government has set time and distance standards for provider networks that vary by provider type and county size. In a large metropolitan county, for example, 90% of plan enrollees must have access to a cardiologist within 10 miles or 20 minutes of travel time. Other standards based on appointment wait times will also take effect for the 2024 plan year.

The new standards are just a first step in monitoring and defining the nebulous concept of network adequacy, health policy experts say. The Affordable Care Act requires marketplace health plans to have an adequate network of providers, and the Obama administration has gradually introduced some standards to define this. The Trump administration suspended direct federal oversight of network adequacy in the 2018 plan year, saying the approach would reduce the regulatory burden on insurers, but a federal court ultimately overturned that change, kicking the ball back into the federal government’s court. Meanwhile, states also regulate health plan provider networks, but with widely varying degrees of effectiveness, the researchers said. The National Association of Insurance Commissioners has developed a model network adequacy law, but only a few states have adopted it.

Consumers shopping for marketplace plans have few tools to evaluate a plan’s network—and no easy way to compare plans based on the overall breadth and depth of their networks. On HealthCare.gov and in many state marketplaces, plan buyers can enter the names of their doctors and find plans that include these providers. But they also need to call providers directly to confirm that information, as plan provider directories are often inaccurate, the researchers said. The No Surprises Act, passed in 2020, includes provisions designed to address the problem, but has not yet been fully implemented.

Tips for finding a plan with a decent network

Avoid choosing a plan based on price alone, Politz said. “There could be all kinds of things that move that premium around, and a tighter network of providers is certainly one of them,” she said.

If you’re switching from an employer-sponsored plan to the marketplace, don’t assume you’ll get the same provider network if you choose the same insurer that offered the employer plan, Politz said. “Insurers have designed a series of provider networks that they offer in different markets,” she said. “Their large employer clients may get their widest networks,” she said, while marketplace plans may get narrower networks.

Consumers looking for the provider network that’s right for them also shouldn’t read too much into “PPO,” “HMO” and similar labels, said Justin Giovanelli, associate research professor at Georgetown University’s Center for Health Insurance Reform . Those classifications “mean a lot less than they used to, especially when it comes to understanding whether or not a plan has multiple providers,” he said.

Gumuccio, the Chicago anesthesiologist, said he initially chose his Blue Cross Blue Shield plan because his son’s treatment center accepted the insurance. For coverage in 2023, however, he will seek a plan that includes a top-notch local children’s hospital, he said, even if that means his son’s speech therapy may suffer.

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