Affordable Care Act - "Narrow" Networks for plans on the Exchange

[rantk81]

I'm sure I'm not the only one here who is counting on the plans in the ACA-Exchange in order to allow for me to retire early with health insurance.

As I'm getting closer to my retirement targets, I have been looking through the healthcare.gov website, and have been looking at the 2016 plans so that I can get a reasonable estimate about how expensive these plans are, and a reasonable estimate about the network of healthcare providers that are part of the networks for the plans.

I really am not liking what I see.  (For reference, I'm looking at the plans near where I live, in Chicago, which does seem to have a lot of different plans and insurance companies listed.)


First of all, I don't see any mention on the plans for any coverage of "out of network" doctors.  On the surface, this seems reasonable -- that you stay within a list of cost-effective doctors/facilities.  However, when I actually drill down and search the list of providers, I'm shocked that some of these companies are allowed to sell these plans and pretend that they will actually cover you for anything.  On one of the listed companies, I tried their website's "in-network provider search", and literally zero doctors that I had ever used in my more-than-a-decade in Chicago were on their lists.  Furthermore, Chicago is chock-full of medical schools and cutting-edge medical facilities, but the actual facilities that are in-network to these plans are the hospitals that are on-par rating with the general county hospital (Stroger.)


Secondly, even though there are a LOT of plans listed, the pricing model of premium and deductible basically puts them into two general categories:
1)  Somewhat lower premium, but the (maximally allowed?) astronomical deductible near $6-$7000 per person
or
2) A premium that is much higher, with a little bit lower deductible -- but that deductible is completely (almost exactly dollar-for-dollar) offset by the increase in premium.

I honestly don't see why anyone would choose the higher-premium-with-lower-deductible plans, since: if you have a lot of expenses in the year, you will essentially be paying the same either way... but if you didn't have a lot of expenses in the year, you would come out ahead with the lower premium plans.  Why would anyone pay the higher premiums in order to have a lower deductible in this case?  They seem to offset one-another dollar for dollar.  The fudge-factor if you can "guess ahead of time" and pin down exactly what your medical expenses for the year will be, might save you a couple hundred dollars either way... But the "choice" seems ridiculous.


Third (and corollary to #2), I would consider all of these plans to just be very-expensive-catestrophic-coverage plans.  For someone in my early-30s who doesn't smoke, why pay $400/mo premium for a plan that is just going to ding me with a $6000 deductible anyway?  Over $10K out of pocket in a year before the insurance starts to pay for anything other than an annual physical?  Seems to me, it would make a lot more sense (economically speaking) to go without insurance and pay the tax penalty every year, and pay for medical costs out of pocket.... and if some costly medical procedure was needed, just hope I could delay it until the next enrollment period at worst, or contrive a "qualifying event" in order to get onto one of the plans.  With the extreme-narrow networks on the cheaper plans, I wouldn't even feel like it is worthwhile to pay the premiums, because I think mentally I would feel as if I wasn't even insured anyway...


I guess my question to "Ask Mustachians" is, what are your experiences with the exchange plans you have in your area?  Do you notice the nonsensical cost structure of the plans too?  Have the very-small networks of doctors been an issue for you?


P.S.  Please don't turn this thread into a political debate... We all have our own opinions on it, and that's fine.  I'm just

[iris lily]

We are countng down to 23 days until we start coverage by an ACA plan.We are switching from
 COBRA coverage because it runs out in 23 days.

We used a health nsurance broker to find an ACA plan. It was not ne essary, but I hate dealing with health insurance. We are old but take no medications, I just want to make sure coversge is in place for the big expenses.

The only requirement we had was for DH's physician to be included and we got that.

We will save around $6,000 annually in premiums. We have no idea what health services we will use, so can't determine that.

[Paul der Krake]

I was on an ACA plan with a narrow network in 2014. The website showed there were only TWO primary care doctors in my metro area of 3 million, but that wasn't true at all. One of their reps showed me how to construct the search criteria, and sure enough, there were dozens of options.

Bottom line, insurers have crap technology. Take everything you see on their websites with a grain of salt.

I honestly don't see why anyone would choose the higher-premium-with-lower-deductible plans, since: if you have a lot of expenses in the year, you will essentially be paying the same either way... but if you didn't have a lot of expenses in the year, you would come out ahead with the lower premium plans.  Why would anyone pay the higher premiums in order to have a lower deductible in this case?  They seem to offset one-another dollar for dollar.  The fudge-factor if you can "guess ahead of time" and pin down exactly what your medical expenses for the year will be, might save you a couple hundred dollars either way... But the "choice" seems ridiculous.

Yes. The public sucks at math, saving, and taking care of their bodies. But they like predictable expenses, so that's what The Market© gives them.

[tonysemail]

the high deductible health plan is a core design philosophy of obamacare.
legislators wanted to encourage people to ration their own medical care in order to control costs long term.
perversely, the out of pocket maximum is set too low, such that it encourages people to lump all their medical expenses into a single year and consume MORE healthcare that year.
My parents hit the OOP max and asked their doctors to perform extra tests that could have been done the following year.

Does your $400/mo quote include tax credits for low income?

[rantk81]

No, I wasn't including any potential tax credits.  (I was using my current income for estimates... which probably was a mistake.  I should use my expected reportable income while FIRE'd.)

I suppose based on the subsidies, the plans that front-load the costs into the premiums instead of into the deductibles might make a little bit more sense then, if the tax code is picking a big chuck of that...

Another thing I noticed while browsing the listed plans... at least in my area, there were very few HSA compatible plans.  Maybe 2 total out of the entire list were compatible.  A lot of plans were very close to being HSA-compatible, with sufficiently high deductibles and sufficiently low out-of-pocket max values, and with hardly any services covered before the deductible... except it seems like they would cherry-pick one minor detail that could potentially be covered at a very minimal level before the entire deductible is met, hence, "invalidating" the HSA-eligibility of those plans.  That seems bizarre to me... Wonder if that is intentional?

[Axecleaver]

The provider network search tools for payors are notoriously inaccurate. They don't spend much time or money keeping them up to date, and rely on providers to manage their entries. You're much better off calling your providers to ask if they plan to participate with "X" plan.

That said, the ACA removes a lot of levers that payors used to have for managing costs. They can't cut benefits anymore; they're subject to medical loss ratio payments if they overestimate their claims expenses; and they're somewhat constrained in the profit they can make by risk sharing corridors. So one tool they have left is provider networks. They've all been using that to narrow their networks, and negotiate better deals with providers. In areas with limited choices, this can make a plan very hard to use.

But consumers are wising up to this, and extremely narrow networks are being punished for it in the marketplace. Because state insurance departments require submitting networks before the calendar year starts (some many months in advance), payors can't modify their networks on a whim. So there are some market forces balancing out the payors' bad choices. I predict we'll see some consolidation in the next few years, and limitations on competition which will move the country closer toward a single payer option as the only reasonable choice. The ACA as we know it today will change.

[Gin1984]

I think it also depends on WHERE you are.  My mom in Southern California had no problem finding what I found to be decent coverage and cost (but I am used to COBRA costs so YMMV).  I, too, however found that the bronze plans better because the savings in the deductible were offset by the premium.  That said, it is the same way for my employer plan, which is why I am on an HSA even with medical issues. 

[Mr. Green]

I'll second the notion that it depends on where you are. I've lived in Maryland my entire life, and I've been insured with BlueCross BlueShield my entire adult life through insurers, and now through the ACA. BCBS is the major insurer in the area and their network covers a ton of doctors.

The biggest risk with going without insurance entirely is the catastrophic event that is immediate. You get hit by an uninsured motorist or your collapse due to an unknown medical condition. Anything that results in a couple day hospital stay is probably going to yield a 6-figure bill without an insurance company there to negotiate. It's a risk that could effectively end your ER if it happened.

I'm not certain, but I believe that even the narrow plans have to cover emergencies as if they were in-network.

[spicykissa]

I'll second the notion that it depends on where you are. I've lived in Maryland my entire life, and I've been insured with BlueCross BlueShield my entire adult life through insurers, and now through the ACA. BCBS is the major insurer in the area and their network covers a ton of doctors.

The biggest risk with going without insurance entirely is the catastrophic event that is immediate. You get hit by an uninsured motorist or your collapse due to an unknown medical condition. Anything that results in a couple day hospital stay is probably going to yield a 6-figure bill without an insurance company there to negotiate. It's a risk that could effectively end your ER if it happened.

I'm not certain, but I believe that even the narrow plans have to cover emergencies as if they were in-network.

I'm an ICU nurse, and I've often wondered how some of my non-local patients fared with the bills afterwards. People who were on vacation and had a cardiac arrest, for example. Per Healthcare.gov: "Access to out-of-network emergency room services: Insurance plans can’t require higher copayments or coinsurance if you get emergency care from an out-of-network hospital." The sticking point is what constitutes "emergency care"? If you get admitted to the out-of-network hospital after some hours in the ER (which WILL happen in many true emergencies), and then spend days as an inpatient because you're too sick to be discharged/transferred, is the whole bill covered as in-network? It doesn't sound like it. The majority of the charges would be the care received outside of the actual ER. Pretty terrible. That's not even counting nasty surprises like out-of-network providers at in-network hospitals, which often happens to people too.

[icemodeled]

Absolutely what you describe is what we have now with the ACA. We are late 20s, so we are more betting on the side of good health continuing for awhile (I hope) so we went with a plan with a very low premium and a very high ($6000) deductible per person. Like you said, it's more for catastrophic events. Just like with our home insurance, we have always more so had it with a high deductible and would mostly only use it for a total or major loss. Same with our health insurance, though we do use the 100% covered preventative care. So if we have little to no health issues for the year, we do well since our premium is so small, we save back in case the worst comes up and we have to pay out the deductible.

Unfortunately, we just received a letter saying that our current plan will be terminated by the end of this year and we must choose another one in November - great.. We JUST got it all set up and believe me it wasn't easy. Worst thing ever is calling them with questions. If it's not on their screen.. They have no idea.

Before we moved, they were continuely taking more places out of network - like our closest hospital which was 15 min away. It was taken out of network so the nearest one would be 40 minutes! That's great health care?

[slb59]

+1 to what others have said about actually calling providers instead of relying on those online directories. I don't even have an ACA plan (Aetna through work), and their directory is crap. I was looking for a pediatrician and found the doctor we had just seen at a minute clinic listed as a pediatrician with the minute clinic's address. I was only looking for a pediatrician in the first place because the directory had dropped our current doctor and I thought they were no longer covered, but I finally gave up and called the office, and found out it was just a paperwork glitch.

For out-of-network costs, make sure you're looking in the Summary of Benefits and Coverage, there's usually a link to it when you're looking at a plan on healthcare.gov. A lot of companies explain their out-of-network costs there.

Also, on the high deductible issue - keep in mind if you get a premium tax credit, you'll be getting a reduction in what you pay, too. So both the premium and that deductible will be lower.

[geekette]

Also, on the high deductible issue - keep in mind if you get a premium tax credit, you'll be getting a reduction in what you pay, too. So both the premium and that deductible will be lower.

If your income is < 250% of the Federal Poverty Level, you qualify for lower deductible and copays as well as the premium credit for Silver plans only - see here.