Oh to be a fly on the wall…when Obama meets insurance execs

Do you ever wonder what goes on behind closed doors between president Obama and insurance company executives? I sure do.

We’ve all had to work with people we don’t like or organizations we don’t align with philosophically at some point.  It happens. Sometimes the wheels come off and sometimes everything works out okay.

The Affordable Care Act, as it currently stands, needs for the Obama administration and the insurance companies to work together. I mean really work together.

Insurance companies know that they are rarely on the Christmas list of Americans (although studies indicate that they are appreciated more than one would assume).  But ever notice that insurance companies usually remain silent when there is a pile on? They lobby hard and support politicians but they usually just fade away and keep their mouths shut in a public fight. Hmmm.

President Obama, on the other hand, has been quite vocal in his assessment of insurance companies. Some of his most forceful language in support of his law has been to point out that the carriers will no longer be able to do harm to Americans.  He has come close to declaring them flat out evil to the core (it’s up to you to decide whether he is right or wrong).

However, now they have to work — I mean really work — together to make the
ACA operate well for the American people.

So, here is what I would love to know: Behind closed doors, does the conversation between President Obama and insurance execs go like…

Obama door number 1.  “Ok, guys and girls, I need to beat the hell out of you in the public eye but we need to get this thing done. We will all thrive if we work together.  Just don’t pay any attention to my rhetoric. You with me?”

Obama door number 2. “Well, this is the law that got passed.  I tried to obliterate you but I had to compromise, so you better play the game.”

Obama door number 3. “You know where I’m  headed here.  You have have a half life left. You need to decide if you want that to be a long half life or a
short one. You got me?”

On the flip side, are insurance company execs thinking…

Insurance door number 1. “This law will be SO awesome for us!”

Insurance door number 2.  “There is NO way we can survive without the federal government supporting us and our efforts.”

Insurance door number 3. “We are SO screwed and the only hope we have for long term survial is if this ACA law implodes.”

Oh, I wish I were a fly on the wall in the room when these SEEMINGLY strange bedfellows meet behind closed doors…

Mike

Keep Your Doctor? Your Preferred Hospital? Do Your Homework Before Selecting A Plan.

With healthcare reform and the Affordable Care Act almost in full bloom, more potentially game-changing unintended consequences are starting to emerge.  One such consequence stems from the introduction of “narrow networks.” Initially intended for healthcare.gov or Exchange based products, most carriers have utilized the narrow networks to round out the low end of their 2014 individual and employer sponsored group plan offerings.

Employers changing plans in 2014 will have to pay closer attention to network selection. Or, potentially pay the price when you or your employees learn that preferred, familiar, closest and, in some cases, the best doctors and hospitals may not be in your plan’s network.

Until now, network size has not been a huge determinant in selecting carriers and plans. Most of the major insurance companies in the group market provided access to a vast selection of doctors and hospitals, especially those providers with the best reputations. With the advent of the Affordable Care Act and its impact on rate structures, benefits, and plan designs, carriers have less discretion on plan designs and rate setting. As a result, they are turning to these “skinnied” down networks as a primary means to manage costs, differentiate, and vary premium across their respective plan offerings.

In order to gauge the impact, I checked the online directories of two of the major group health plans in one large county in the Tampa Bay market where I reside. While decidedly informal and unscientific in nature, it nevertheless highlights the contrast.

I compared a few key categories of each respective carrier’s heretofore “staple” network (still offered; higher rates than the narrow network plans) against the new skinnier network offering (newly offered; lower rates than staple network plans). In both cases the “staple” networks contained a significantly greater number of providers, were described as open access, and did not require referrals. The new skinnier networks offered fewer participating providers, required designation of a Primary Care Provider (“PCP”), and required PCP referrals to obtain other services.

In comparing several categories of specialists, the narrow networks were on average comprised of about 50% fewer specialist physicians than the traditional networks.  However, the biggest difference between the customary networks and the newer narrower networks came when comparing participating PCPs and hospitals.  Here’s the breakdown:

Carrier 1

Carrier 2

OA Network

Narrow Referral-Driven  Network

OA Network

Narrow Referral-Driven  Network

Primary Care

1280

227

1300+

325

Hospital Primary and Secondary

12

3 (includes 1 major)

18

10 (includes 1 major)

We’ll be monitoring further developments, reporting more on this issue in future posts as well as discussing practical alternative strategies to this growing cost vs. access issue (eg. direct contracting, plan customization, buying a lower cost plan and supplementing, etc.).

In the meantime, what can you do?

When it comes to changing to new plans, look before you leap.  Or, at least plan on doing some homework.

To read more about this topic go to these recent articles in the Washington Post, Insurers Restricting Choice of Hospitals and Doctors to Keep Costs Down,” and at Health Care Policy and Marketplace Review, If You Like Your Doctor You Will Be Able to Keep Your Doctor. Period.”

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