Insurers Are Renegotiating Contracts, Narrowing Networks Under ACA

Some consumers whose health plans are being canceled because they do not comply with the Affordable Care Act might see lower premiums but narrower provider networks when they enroll in new coverage through Covered California, NPR's "All Things Considered" reports (Bartolone, "All Things Considered," NPR, 12/9).

Background

About one million individual policyholders in California have been notified that their current insurance plans will be discontinued at the end of the year because the policies do not meet minimum coverage requirements under the ACA.

In late November, state officials rejected a plan by President Obama that would have allowed insurers to continue selling policies in 2014 that do not meet the ACA's minimum coverage requirements (California Healthline, 11/27).

Details of Narrower Networks

According to "Shots," insurers have started to renegotiate their contracts with some health care providers in order to keep plans offered through the exchange affordable for consumers.

Patrick Johnston -- president of the California Association of Health Plans -- said, "Transitioning [to plans on the exchange] might mean looking or having difficulty signing up exactly the same doctors."

For instance, Blue Shield of California has said it will include just 50% of the physicians and 75% of the hospitals in 2014 that it did in this year's individual plans.

However, Blue Shield has said it will offer exclusive provider organization plans -- or EPOs -- to first-time buyers for a lower cost than other plans on the exchange. Such plans provide health care services at lower rates by offering services from managed care organizations.

Reaction

Some observers say insurers who are dropping providers and hospitals in their networks have not been transparent enough about the changes in cancellation letters to policyholders.

Susan Shargel -- an insurance broker in San Francisco -- said that the letters do not contain "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."

However, Gerry Kominski -- director of the Center for Health Policy Research at UCLA -- said, "If we want to keep health care from becoming completely unaffordable for everyone, at some point something has to give." He added, "[I]n this case what's giving is the ability to choose any doctor and any hospital."

Kominski said that some plans on the exchange will offer more doctor and hospital choices, but they likely will be more expensive. He also said that while the tactic of narrowing provider and hospital networks existed before the ACA, the trend has sped up since the law's passage ("All Things Considered," NPR, 12/9).