Health plans with no providers may reshape Obamacare
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The Trump administration is planning something new for people shopping for Affordable Care Act coverage next year: health plans without a list of in-network doctors and hospitals.
Why it matters: The "non-network" plans could inject a dose of long-sought innovation into health care pricing. But they also could expose patients to more surprise bills and further destabilize ACA markets, policy experts warn.
- The proposal is landing amid upheaval in the ACA marketplace: Enhanced premium subsidies have expired, and the Trump administration is promoting high-deductible Obamacare plans.
State of play: Last month, Trump health officials proposed allowing the sale of plans that don't contract with providers on the ACA exchanges.
- Insurers in these arrangements announce a rate they'll pay for covered services. Enrollees then have to find providers willing to accept that sum — or pay the difference out of pocket.
- The option could spur "a more competitive marketplace where providers would need to consider their pricing strategies more carefully to attract and retain patients," per the proposal.
The plans are a sharp break from the status quo, in which insurers negotiate rates in advance with a defined network of doctors and hospitals.
- The networks function as both a cost control mechanism and a consumer protection tool, ensuring patients have access to covered care.
- Going without networks isn't an entirely new idea: Some large employers offer the option, and plans without provider networks were sold to small businesses on Wisconsin's Obamacare marketplace in 2016, per Modern Healthcare.
- The Biden administration blocked the plans from being sold on ACA marketplaces because it didn't see a way to ensure they offered necessary consumer protections, said Ellen Montz, who led marketplace regulation and is now a managing director at Manatt Health.
Where it stands: The Trump administration now says that the plans could meet ACA requirements as long as they ensure adequate access to providers.
- States would still have the final say on whether the plans are sold on the exchanges.
- In order to get certification, non-network insurers would have to show that "a minimum percentage" of local providers accept their rates as payment in full, and attest that they meet a handful of other standards.
- But the rule doesn't define what percentage of providers must opt in. And the administration doesn't spell out how the new arrangements would be explained to consumers when they're shopping for coverage.
What they're saying: Plans without a set list of providers empower people to play a more active role in their health care, said Patrick Quigley, CEO of non-network health insurer Sidecar Health.
- They're also able to offer lower premiums, which could be a selling point for consumers who no longer get government assistance.
Case in point: There is evidence that setting a benchmark payment rate and asking patients to shop can decrease costs.
- California's public employee health plan started experimenting with it for hip and knee replacements in 2011, and within two years the average price charged by high-price hospitals dropped roughly 20%.
The other side: Non-network plans require patients and doctors to take on a lot of extra work that's usually done by the insurer, said Katie Keith, director of the Center for Health Policy and the Law at Georgetown's O'Neill Institute.
- And the arrangements can expose patients to surprise medical bills, especially in emergency situations.
- Without a contract between the provider and the insurer, "there is no guarantee," Keith said. "Even if you could adequately assess the 'network adequacy' of one of these plans, it could change day to day."
The traditional ACA experience is already full of administrative hassles, including pre-treatment reviews and long waits to see an in-network doctor, said Brian Blase, president of Paragon Health Institute and a health official in Trump's first administration.
- "There's pros and cons with everything, but there's a lot of pros with a plan that pays any provider," said Blase, who's also an adviser to Sidecar Health.
Non-network plans' low premiums could influence how other ACA coverage is sold, because subsidies are pegged to the second-lowest cost plan in the silver tier of a given market.
- If non-network plans become that benchmark, people who prefer traditional coverage could be drawn in to avoid paying more for a plan with a network.
What we're watching: A final decision on the policy will come later this spring.
