ACA Insurance Exchanges Launch Amid Coverage Questions

Clara Ritger

Leading up to Tuesday’s opening of the Affordable Care Act health insurance exchanges, much of the political punditry focused on whether the customers would come.

Now that the exchanges are open for business, the next question is whether uninsured Americans will be satisfied with what they find when they get there.

“I don’t think we can sit here today and say for certain whether they will ultimately have the care they need,” said Ceci Connolly, managing director of PricewaterhouseCoopers’ Health Research Institute. “In our interviews with providers, it was a big concern.”

PricewaterhouseCoopers last month released its findings that in order to lower premiums, insurance companies are limiting the number of hospitals and physicians available to consumers in ACA exchange plans.

“Insurers passed over major medical centers in Chicago, Indiana, Kentucky, Los Angeles, Tennessee, and elsewhere in an effort to tamp down hospital and medical costs,” the report said. “But the use of narrow networks may also lead to higher out-of-pocket expenses, especially if a patient has a complex medical problem that’s being treated at a hospital that has been excluded from their health plan.”

Sometimes, however, a narrow network includes a provider such as the Mayo Clinic, which offers a full range of services, Connolly said.

“Much is going to depend on the individual and what their health status and needs are,” she said.

It is unclear whether patients will be willing to make the trade-off of having fewer choices for a lower price tag. Gary Cohen, director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services, said limiting options to drive down costs isn’t unique to Obamacare.

“The use of narrow networks is something that people have been talking about for a long time as a way to keep health care costs down,” said Cohen, who is leading the implementation of the exchanges.

But Chris Jacobs, senior health policy analyst at Heritage Foundation—the conservative think tank associated with Heritage Action’s campaign to defund Obamacare—said patients have more to worry about than whether they can keep their doctor.

“Are there even enough doctors in the network?” Jacobs said. “If they get swarmed with people, are they going to be able to take care of them?”

One of the reasons the industry has limited the networks, Connolly said, is in response to pressure to keep prices on the exchange attractive.

“This is a very price-sensitive population that is lower in income,” she said.

According to the PricewaterhouseCoopers study, 94 percent of insurers believe premium prices will matter most to the people weighing insurance coverage on an exchange.

It’s why some insurers have opted out of some marketplaces altogether.

One-third of health insurers don’t plan to participate in the exchanges, or haven’t yet decided, according to the PwC study, citing concerns about profitability, understanding the behavior of newly eligible customers, and anticipated high use of services among those who enter the exchanges.

In some markets, this reluctance has resulted in a loss of competition. According to the Health and Human Services Department, 5 percent of people—including those in West Virginia and New Hampshire—will be shopping for exchange plans offered by only one insurance company.