Obamacare health plans: Enough doctor choice?

Less is more common for Obamacare.

Insurance plans sold on government-run Obamacare exchanges on average have 34 percent fewer hospitals and doctors—including specialists—in their provider networks than health policies sold outside those exchanges or offered by employers, a new analysis finds.

The gap in health providers covered by plans is particularly wide when it comes to cancer and cardiac specialists, according to research by the Avalere Health consultancy.

Obamacare policies on average had 42 percent fewer oncology and cardiology specialists available to patients in their networks than private plans sold outside the government marketplaces.

Avalere's analysis quantifies what have to date been anecdotal reports about the more than 10 million customers of newer Obamacare plans often facing "narrow" or "skimpy" health provider networks compared to customers of traditional forms of private health coverage.

If a person uses a hospital or doctor outside their health plan's network, their medical costs are not covered to the same extent—if at all—by their insurance. And they thus must foot a bigger share of the bill by paying out of pocket.

For its report, Avalere Health examined the largest rating region—an area where a group of health plans are sold—of Florida, California, Texas, Georgia and North Carolina—the top five states for Obamacare enrollment this year.

"Patients should evaluate a plan's provider network when picking insurance on the exchange," said Elizabeth Carpenter, vice president at Avalere. Carpenter noted that costs of being treated "out of network" are not capped by the Affordable Care Act as they are with in-network treatment, "leaving consumers vulnerable to high costs if they seek care from a provider not included in their plan's network."

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"The good news is that the exchanges have a lot of choices for consumers," she said. "What's important is that consumers recognize important plan features like network size to ensure that plan meets their needs."

Obamacare exchanges, as a rule, offer fewer plans to customers than the policies available outside the exchanges. However, the exchanges are the only place that eligible customers can receive federal tax credits to lower the cost of their monthly premiums—nearly 9 out of every 10 exchange customer gets such subsidies.

In response to the report, a spokeswoman for the insurance lobbying group America's Health Insurance Plans said that a "key point to keep in mind" is that "consumers who are shopping on the exchanges are increasingly price sensitive."

"They also want choices," said the AHIP spokeswoman, Clare Krusing. "So when they are shopping for coverage, they are looking for the plan that is right for them."

"Particularly for those individuals who are looking for more affordable premiums, a tailored network of providers is one tool that plans use to keep coverage affordable. All of these networks must meet federal and state requirements on network adequacy as well," she said.

The report comes several months after the federal Centers for Medicare and Medicaid Services said it will closely analyze the "network adequacy" of 2016 health plans, focusing "most closely on those areas which have historically raised network adequacy concerns," including hospital systems, mental health providers, oncology providers and primary care providers.

"If CMS determines that an issuer's network may be inadequate under the reasonable access review standard, CMS will notify the issuer of the identified problem area(s) during the certification review process and will request that the issuer address the concern by adding providers to its network or submitting a justification explaining how it will provide reasonable access to enrollees," CMS said in a guidance issued in February.

Asked about the Avalere analysis, CMS spokesman Aaron Albright pointed to a trio of public surveys that found that customers of Obamacare exchanges were largely happy or satisfied with their plans. The survey by Gallup found that 1 out of every 7 people covered by an exchange-sold plan rated it as "excellent" or "good," and the Commonwealth Fund survey found that 73 percent of exchange customers said they were "very" or "somewhat" satisfied.

A survey earlier this year by J.D. Power found that satisfaction among new Obamacare enrollees "has significantly increased from 2014, and health plans obtained through the [exchanges] generate levels of member satisfaction equal to or higher than plans not obtained through the marketplace exchange."

Brian Hoyt, managing director at Berkeley Research Group, said Avalere's analysis "reflects the pressures that plans are finding to contract with providers that would perhaps accept payments they're able to provide under the exchange plans."

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Health providers who contract with Obamacare exchange insurers are generally willing to accept lower rates of reimbursement for their patients in the hope they will make up the money on the volume of patients treated, Hoyt said.

While narrow provider networks can limit customers' options for treatment under a policy, they often pay less in monthly premiums as a result, since their insurance plan has more bargaining power with providers, he added.

Hoyt, in a recent white paper for BRG, noted that even as regulators look more closely at whether insurers are offering customers enough choices in terms of providers, concerns are increasing about the accuracy of information that insurers share with consumers about the members of their network in the form of "provider directories."

"Provider directory inaccuracies represent a growing and significant risk both to consumers and health plans," Hoyt wrote in his paper. "Inaccurate directory information may limit a consumer's ability to verify if a preferred doctor is in-network, or to know how many and what types of providers would have to be accessed under a particular product offering."

Mistakes in network directories can also cost insurers money.

In April, insurance giant Aetna was fined $1 million after many customers complained that more than 6,800 pharmacies listed as in network by their insurer's website and call center were actually out of network.

Hoyt's paper noted the filing of eight separate lawsuits against insurers in California "due to network adequacy issues, including provider directories."

In reaction to stories about patients being surprised by out-of-network charges by providers, New York state this past spring enacted a law that says patients don't have to pay more than in-network out-of-pocket costs if they are charged for out-of-network emergency services or so-called surprise bills. Such surprises include patients being treated without their knowledge by an out-of-network doctor at a hospital that is in network for the person's health plan.

Kev Coleman, head of research and data at HealthPocket, a technology company that compares and ranks health plans, said network size and accuracy of directories are critically important for Obamacare customers.

"At the end of the day, health insurance is only as a good as the doctors and hospitals that accept it," Coleman said.

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"Narrow networks of health providers are typically not a concern of consumers who use health services infrequently," he said. But for heavier users of health services, including patients who rely on specialists, "they need to confirm health plan acceptance from those providers before enrollment, and asking the health plan if the providers are in network isn't good enough, because the provider data isn't always up to date," he said.

People who don't need specialists should confirm the hospitals and doctors they do or may need are local, Coleman said.

While "consumers should not rule out a plan just because it has a narrow network," Coleman said, "narrow networks that exclude top hospitals or cancer centers can spell financial disaster is a person needs care at one of those out-of-network facilities, and then has to pay out of pocket."