WASHINGTON – A group of physicians and health policy experts warned Congress some Americans might begin to see smaller provider networks and higher premiums under the nation’s new healthcare law.
Chairman of the House Oversight and Government Reform Committee Darrell Issa (R-Calif.) held another hearing last week on the impact of the Affordable Care Act. In the last few months, the committee has embarked upon an examination of the details of how the ACA was implemented, along with the troubled rollout of the online health insurance marketplace.
This time the committee convened a panel of physicians and healthcare experts to scrutinize the impact of Obamacare on provider networks and reports that the healthcare law is increasing insurance costs.
Dr. Patricia McLaughlin, an ophthalmologist based in New York City, said insurers are introducing limited networks and announcing new plans that will offer only in-network benefits, excluding all out-of-network doctors.
She noted the problem of limited networks is that many health plans have substantially reduced or eliminated previous coverage options that allowed patients to see the doctor of their choice.
“No patient should have to give up all the doctors that they trust and have had longstanding doctor-patient relationships over many years,” McLaughlin said. “This has turned into a house of cards about to fall affecting the lives of millions and severing doctor-patient relationships over and over again.”
McLaughlin told the committee she could lose 20 percent of her current patients due to the cancellation of most out-of-network coverage under the ACA.
Dr. Jeffrey English, a neurologist at the Multiple Sclerosis Center of Atlanta, said the law punishes doctors like him because he recommends too many costly procedures, such as MRIs and brain-image scans, compared to his peers.
“In reward for my passions to prevent real people from becoming disabled, CMS and insurance companies like United Healthcare are going to post negative grades in my name,” he said. “They will financially penalize me or the institution I work for, as I am trying to practice quality care to some of our most vulnerable patients.”
Rep. Gerry Connolly (D-Va.) complained that Republicans on the committee had cherry-picked doctors who held negative views of Obamacare and had refused to allow more supportive witnesses to testify. “The idea that your experience is to be generalized as universal is false. And it does a disservice, in my opinion, to this discussion,” Connolly told the witnesses. “None of you are policy experts. And none of you universally speak for your profession.”
Issa replied the Democrats had not suggested any doctors for the panel, and the only witness they had requested was a policy expert.
Avik Roy, a senior fellow at the conservative Manhattan Institute, said the ACA taxes premiums, pharmaceuticals, and medical devices in a manner that has the net effect of increasing the cost of insurance.
He noted sicker and older individuals have “a compelling economic incentive” to enroll in the ACA marketplaces, while healthier and younger individuals have a smaller incentive, creating adverse selection in the system.
Roy urged lawmakers to adopt legislation that would require the Human and Health Services Department to provide weekly updates on exchange enrollment statistics. He said this would help monitor adverse selection.
Roy said research by the Manhattan Institute shows that underlying premiums will increase by an average of 41 percent across the nation. Among the states seeing large increases are Nevada (179%), New Mexico (142%), North Carolina (136%), and Vermont (117%).
The analysis also found that eight states will see average premiums decreased under the law, including New York (-40%), Ohio (-21%), and Massachusetts (-20%).
“Insurers recognize that the only way they will be able to control plan costs is by limiting coverage to a smaller number of providers willing to accept low reimbursement in return for a high volume of patients,” Roy said.
Judith Feder, the only witness requested by the Democrats, praised the law for a “remarkable slowdown in the growth of healthcare costs.” Feder, a healthcare expert at Georgetown University, credited in part the ACA’s elimination of overpayments to Medicare and its promotion of initiatives to support efficient, higher quality care for the cost growth reductions.
She identified political resistance as the biggest barrier to realizing the law’s potential, including unwillingness in many states to establish their own marketplaces or to expand Medicaid.
“To impede its implementation and return to a world without the ACA – with 50 million people uninsured, insurance markets that deny coverage based on pre-existing conditions, and rapidly escalating costs – is simply unacceptable,” she said.
Edmund Haislmaier, a senior research fellow in health policy at the Heritage Foundation, told lawmakers reports of insurers limiting provider networks are both “widespread and significant.”
He said the way Obamacare provides cost-sharing subsidies for coverage is causing narrower doctor options.
In most states, the government will use tax credits to help people with family incomes within a specific range of the poverty line pay for their premium. The government uses the cost of the second cheapest silver plan available in a specific area to calculate the tax credit, and once it is calculated a person can apply that amount to the purchase of any available exchange plan.
Haislmaier said Obamacare’s cost-sharing subsidies are available only to people earning less than 250 percent of the poverty level, and only if those people enroll in silver plans. Individuals can purchase the same plan for the same nominal amount, while, based on their different incomes, end up with different deductibles and co-pay levels for their coverage.
As a result, carriers selling qualified health plans are expecting sick, low-income enrollees to flow into the silver plans and middle-income enrollees who will receive less or no help with cost-sharing to flow into the bronze plans. Because lowest-income enrollees are likely to have a high demand for care, along with limited exposure to co-payments and out-of-pockets costs, they will not likely do much to minimize use of care.
To cope with this dynamic, many carriers are planning to economize by making the silver plan provider networks particularly narrow, and letting their other plan have somewhat bigger networks.
“What’s happening is the insurers will get paid, but they are no longer able to use a tool of cost sharing to steer patients to be more prudent consumers,” he said. “Thus, they must rely on other tools. And that’s, I think, one of the reasons we’re seeing narrower networks in these plans.”
Some Democrats expressed their frustration before the hearing for having to choose between attending the Obamacare hearings last week and traveling to South Africa for Nelson Mandela’s memorial service.
Rep. Elijah Cummings of Maryland, the top Democrat on the panel, likened the fight to implement the ACA to the struggle of Mandela, who fought against apartheid in South Africa.
Cummings, who attended Mandela’s memorial service in South Africa, urged his colleagues to “push for reconciliation” on Obamacare.
“I hope we can work together in a bipartisan way to improve the Affordable Care Act rather than continuing to fight over its very existence,” he said.
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