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California Health Insurers Restrict Doctor Choice To Lower Costs

San Francisco based insurance broker Susan Shargel
Pauline Bartolone, Capital Public Radio
San Francisco based insurance broker Susan Shargel
California Health Insurers Restrict Doctor Choice to Lower Costs
Californians shopping for health insurance next year are faced with many choices and different prices. The plans they choose also come with different combinations of doctors and hospitals. Some people are confused and frustrated.

Diane Shore of Mill Valley is one of a small group of Americans who received a letter that their health policy will be canceled.

The letter from Blue Shield of California suggested a new Blue Shield plan with a small premium increase.

But she’s not pleased.


“My physicians will no longer be in this network of physicians, or the hospitals won’t be as well,” said Shore.

Health Policy Cancellation Notice
The letter from Blue Shield of California suggested a new Blue Shield plan with a small premium increase.
To view PDF files, download Acrobat Reader.

If Shore chooses that Blue Shield plan, the doctors and hospitals available to her will be limited to certain geographic areas, like Marin County where she lives.

“All my doctors are in San Francisco. I live 20 minutes from San Francisco. In fact, it’s more convenient for me to go to San Francisco than to the hospital here in Marin County,” she said.

Shore battled breast cancer in 1998, and said she wants to stick with the same providers she's been seeing since then.

“I want to keep with a surgeon that I know if this ever reoccurred, that I have full confidence in her. And my primary care doctor has been my primary care doctor for 20 years.”


So Shore said she’s looking at other options. And she’s fortunate enough to have help from an insurance broker as she shops for a new plan.

Geographic Limitations Included In Health Plans Next Year

The health plan suggested to Diane Shore was a Blue Shield EPO plan. EPO stands for 'exclusive provider organization.'

Blue Shield of California said it is offering these plans for the first time next year to keep health plans affordable for buyers on the individual market.

Blue Shield EPOs are being offered in four regions in 2014: a swath of counties in Northern California, spanning an area from the Oregon border to Tuolumne County; a second region includes Marin and surrounding counties to the northeast. The other areas include Alameda county and the Monterey region.

People in a Blue Shield EPO plan in these counties are restricted to doctors and hospitals in their areas.

They will not be able to get insurance coverage for a provider in San Francisco or Los Angeles, unless it is an emergency service or Blue Shield authorizes the care as a "necessary" service not available in the EPO area.

Anthem Blue Cross is also offering EPOs in some regions next year, including San Francisco, Los Angeles and San Diego.

San Francisco based insurance broker Susan Shargel said she’s trying to sort out all the new ways insurers are contracting with doctors.

Some Health Plans Will Have Fewer Providers

“It’s enough to give you a migraine, truly,” said Shargel.

California health insurers say some health plans will also have fewer doctors and hospitals than they had this year.

Blue Shield of California, for example, said it will have fifty percent the doctors and seventy-five percent of the hospitals next year than it has in its individual health plan network this year.

Shargel said the changes are not clear in the cancellation letters.

“There isn’t something that says 'Alert! Be aware! Take action now to be sure this works for you...There needs to be a red alert.”

Health insurers say, it’s true, some plans will have fewer provider options next year. It’s happening on and off the exchanges.

Patrick Johnston is from the California Association of Health Plans.

He said the Affordable Care Act requires greater benefits to consumers in terms of coverage and out of pocket expenses, so one of the few cost variables to work with is doctor contracts.

“What’s left to control costs is the network, and in areas where there are a lot of hospitals, some more expensive than others, and a lot of doctors, it’s only natural that a health plan will sign up some, but maybe not all,” said Johnston.

So Johnston said if you’re buying your own insurance next year and want to keep your doctors, you may have to shop around.

“Transitioning might mean looking or having difficulty signing up for exactly the same doctors. But the benefits are rather enormous,” he said.

Price Negotiation Part Of Market-Based Health Care System

Jerry Kominski is with the UCLA Center for Health Policy Research. He said insurers are negotiating for their bottom line.

Notice of Individual Health Benefit Plan Withdrawal
Anthem Blue Cross is offering EPOs in some regions next year, including San Francisco, Los Angeles and San Diego.
To view PDF files, download Acrobat Reader.

"We’re willing to pay you $50 a visit, just for example. If you’re not willing to do that, we know a doctor’s group across the street that will accept that."

Kominski said the trend of narrowing provider networks to keep costs down is not new. But it’s been accelerating under the Affordable Care Act. It happens in group health plans too.

"What we have done in the last 30 years in the United States is move more and more towards a market-oriented healthcare system. And markets depend on price competition."

He said the jury is still out on whether limiting doctors in health insurance will affect quality of care. But he said there’s no question if affects choice.

"So if we want to keep healthcare from becoming completely unaffordable for everyone, at some point something has to give. And in this case what’s giving is the ability to choose any doctor in any hospital."

Kominski and health insurers say some plans may have a wide variety of doctors and hospitals, but you can expect to pay more for that choice.