Trading out-of-pocket cost protection for network adequacy in the ACA marketplace

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Bronze sometimes works

In a prior post, I raised concern that the percentage of ACA marketplace enrollees eligible for strong Cost Sharing Reduction (CSR) subsidies who access that valuable benefit by selecting silver plans has not increased significantly since the American Rescue Plan Act of March 2021 made benchmark silver plans much more affordable. (CSR is available only with silver plans.)

This despite the fact that ARPA rendered the benchmark (second cheapest) silver plan free for enrollees with income up to 150% of the Federal Poverty Level and costing no more than about $45/month for a single enrollee with income up to 200% FPL. While CSR takeup did improve modestly in 2022, it slipped in 2023 — to its lowest level ever for enrollees with income up to 150% FPL (80.2%) and to its second-lowest for enrollees in the 150-200% FPL range.

United Healthcare is a major MCO, but its large-market ACA plans don't reflect that

In the ACA marketplace, insurers whose core business has been Medicaid managed care, most notably Centene and Molina, have increasingly underpriced the competition in markets where they compete. These insurers field narrow networks and probably pay little more than Medicaid rates to providers.

United Healthcare, the nation's largest health insurer, has made waves by reporting large losses in the ACA marketplace and threatening to withdraw from it.  Yesterday Richard Mayhew posited that UHC's complaints mainly reflect the extent to which the giant has gotten its clock cleaned in the marketplace -- offering more extensive networks than competitors, charging much higher rates in many key markets, and thereby likely attracting sicker enrollees who place a premium on provider choices.

Mayhew's main source is an Urban Institute analysis of 2016 rates, mainly focused on 81 ACA rating regions that account for 47% of the country's population. Urban's John Holahan and Linda Blumberg found that in 2015, UHC sold plans in 36 of those 81 regions, but offered the cheapest or second-cheapest silver plan in only eight of them. In 2016, UHC is in 48 regions, and offers cheapest or second-cheapest (benchmark) silver in just 15 of them.

In marked contrast, Medicaid managed care providers, led by Centene (fielding the Ambetter brand) and Molina, are playing in 48 of the 81 regions this year and offering cheapest or second-cheapest silver in 44 of them. That up up from 36 out of 44 in 2015.

Partial protection against balance billing? More on the NAIC model law

I have an article up at healthinsurance.org that assesses (in more detail than the previous post here) the consumer protections against balance billing in the model law recently adopted by the National Association of Insurance Commissioners. 

A key question is what happens after a patient forwards a balance bill to her insurer for negotiation or mediation. Can it come back to bite her?  There's some precedent in Texas law. Here's the gist:

If adopted as is,  how fully will the model act protect a balanced-billed patient who exercises her option to send the bill to her insurer? "If it goes to mediation, the intention is that the patient will be held harmless," say Stephanie Mohl of the American Heart Association, who served as a consumer liaison to the NAIC and advocated for balance billing protections.

The model act does not explicitly guarantee, however,  that once the insurer settles the bill with the provider, it won't hold the patient responsible for a portion larger than he would pay for in-network care.  The Texas law, upon which this provision is most closely modeled, does not provide such a guarantee, according to Stacey Pogue of the Texas-based Center for Public Policy Priorities.

In practice, however, Pogue says that when patients do initiate mediation, the system seems to be "working really well." Anecdotally, she has heard (mainly from insurers)  that the bill is usually resolved with a brief phone call, and insurers usually cover the whole.

The NAIC takes on balance billing

Of all the dysfunctions of the U.S. healthcare system, perhaps the most egregious (besides leaving tens of millions uninsured) is the "balance billing" of insured patients at in-network hospitals by out-of-network providers.

Elisabeth Rosenthal has documented some particularly extreme examples -- e.g.,  a man who arranged with his orthopedist for neck surgery at an agreed price -- and was billed $117,000 by an out-of-network assisting surgeon. Sarah Kliff found a particularly sharp illustration of the roulette-like character of hospital care, in which two women working for the same employer and having the same insurance gave birth within weeks of each other at the same hospital. One was billed $1600 for an epidural by an out-of-network anesthesiologist who happened to be at work that day; the other (who also had an epidural) was billed nothing.  A Consumers Union survey conducted this past March indicated that 30% of  privately insured Americans received a surprise medical bill in the past two years, with their health plan paying less than expected.

This week, the National Association of Insurance Commissioners (NAIC) adopted a model act for health plan network adequacy that includes some protections for patients faced with balance billing. Such model acts are meant to serve as templates for state legislatures to adapt to local needs and political propensities.

I plan to write about the balance billing section of the model rule in some depth next week. This post is a sketchboard -- and an invitation for anyone with expertise in the area or a personal experience to relate to comment or contact me.