This is part of a series of articles on the rollout of Obamacare and how the law will change our health care system. Each Wednesday in September, we will publish two articles — one on the changes in medicine and medical care and one on changes in the insurance industry. We hope this series of articles will help you make better decisions when it comes to your health care and how you buy insurance.
Two of the promises made by President Obama and Democrats in Congress when Obamacare was being legislated and voted on related to whether Americans could keep their existing health insurance if they already had a policy, and whether they could continue to see their current doctors once the health care reform program was fully implemented.
The president went so far as to offer a guarantee:
Here is a guarantee that I’ve made. If you have insurance that you like, then you will be able to keep that insurance. If you’ve got a doctor that you like, you will be able to keep your doctor. Nobody is trying to change what works in the system. We are trying to change what doesn’t work in the system.
The selling of the new program was designed to reassure Americans that little would change for the vast majority of people in the country and that for those for whom things would change, it would only be for the better — the expansion of Medicaid for lower-income people and the promise of subsidized health insurance that could not be denied to anyone with somewhat higher income levels (up to four times the poverty rate income level).
As the October 1 deadline approaches, beginning the period when states are supposed to open their exchanges that will provide various health insurance options for individuals and small businesses, those promises are beginning to ring hollow.
Depending on the plan you choose in the Marketplace, you may be able to keep your current doctor. Most health insurance plans offered in the marketplace have networks of hospitals, doctors, specialists, pharmacies , and other health care providers. Networks include health care providers that the plan contracts with to take care of the plan’s members. Depending on the type of policy you buy, care may be covered only when you get it from a network provider.
When comparing plans in the Marketplace, you will see a link to a list of providers in each plan’s network. If staying with your current doctors is important to you, check to see if they are included before choosing a plan.
There are millions of Americans who currently have health insurance policies as individuals or families, outside of any government-run program (Medicare, Medicaid) or corporation-provided plan. The new exchanges will be a marketplace not only for those not now covered, but for those already with coverage in this market.
One of the reasons why new plans may not include a person’s individual doctors or the hospitals that were in one’s original plan is that the insurance company that provides the current policy may have been unsuccessful negotiating rates with these providers that would enable them to compete successfully on price within the guidelines of the four types of plans — bronze, silver, gold, and platinum — that will be offered in the exchanges. These four types of plans offer various percentages of plan costs that have to come back as health benefits, ranging from 60% to 90%. A 60% plan, the bronze option, will cost far less than a platinum plan, which provides 90% of plan cost as benefits.
The benefits provided by any insurance plan cover specific services at specific prices. The prices will always be negotiated between the insurance company and the providers, and the benefits — the covered services for the new plans offered on the exchanges — have been defined by the Department of Health and Human Services. The variable will be the volume of each service that is provided, which, for now, rests with the providers — the doctors who treat patients, admit them to hospitals, and order tests and procedures. There is very little in Obamacare that addresses this fee-for-service system.
Insurance companies have data on physician-ordering patterns and hospital costs, including lengths of stay for admitted persons and readmission rates. So estimates can be made about whether some doctors will be more costly than others, based solely on the likely volume of procedures and tests and the negotiated prices. The decision by an insurance company to exclude a doctor or a hospital from its network will be largely based on price and volume history, assuming no quality issues have emerged. So, too, insurance companies will decide whether to compete at all on a particular state’s exchanges and, if they do, in which categories of plans. The evidence so far is that in some states there will be new insurance providers competing; in other states, existing insurers are leaving this market.
In the nearly four years since Obamacare was passed, providers have not been sitting around waiting for the new regulations and implementation date. To gain leverage in the negotiation with insurance companies operating on the exchanges, providers have been bulking up — seeking to gain enough market share in individual markets so that it will be difficult for insurers to exclude them. A big part of this trend has been vertical integration — the purchase by providers of private-physician practices, making the doctors salaried employees of the hospital. This trend was already in place before Obamacare was passed, but the new law accelerated the process. In exchange for a salary and staff costs paid by the hospital, and billing and price negotiation becoming the responsibility of the hospital, doctors would now admit all of their patients to one hospital, and all of their ancillary activity, including radiology and laboratory, would be conducted in hospital departments.