Restricted Networks Limit Patient Options
In our previous post, we discussed one of New Mexico residents' major challenges to accessing health care: affordability of health insurance, along with deductibles, copays, and coinsurance.
Today, we focus on another barrier to getting quality health care: limits on which health care providers a plan member can use.
Smaller Networks = Fewer Choices
No more PPO option. To better control costs and to boost profits, insurance companies are creating narrower networks. PPO (preferred provider organization) plans, which enable consumers to go out of network if they are willing to pay additional costs, are no longer an option through New Mexico's health insurance exchange or in the individual private insurance market in the state.
"The lack of a PPO option in New Mexico is one of the biggest changes this year  for insurance consumers," said Amy Dowd, director of the New Mexico Health Insurance Exchange.
It's more than limited choice of physician. Disputes between carriers and hospitals restrict patient choice as well. In Santa Fe, Christus St. Vincent will no longer accept Presbyterian Medicare Advantage patients for non-emergency care. The University of New Mexico and Presbyterian have not been able to reach an agreement, so Presbyterian plan members who use UNM's primary-care services are no longer able to do so. And, of course, Presbyterian's Albuquerque hospitals are not an option for Albuquerque Blue Cross and Blue Shield members.
Out-of-network costs are astronomical. If patients do choose to go out of network, their charges are huge, even if they are in a PPO plan (an option still offered by some employers).
A recent American Health Insurance Plans Report includes a state-by-state analysis of out-of-network charges, compared to Medicare rates.
Examples from New Mexico:
- Some patients seeking emergency care faced potential excess charges averaging more than 700% of the Medicare fee.
- Patients who underwent radiation therapy saw potential charges averaging more than 600% of the Medicare fee.
- Ultrasonic guidance for biopsies incurred excess charges averaging more than 400% of the Medicare fee.
- Potential excess charges for critical care averaged more than 300% of the Medicare fee.
And you thought your in-network hospital charges were covered? To add salt to this wound, not only is provider/hospital choice being limited, and not only is it costly to go out of network, but a patient being treated at an in-network hospital can be billed at an out-of-network rate for services performed by a provider (for example, an anesthesiologist) who is not included in their plan's network.
The problems we face with affordability and access to health care providers are both due to our complex private insurance system.
One of the basic tenets of a competitive free-market system is that if you don't like what you are offered, you can go elsewhere. The ability to have alternatives, to vote with your feet, forces companies to either lower prices or enhance quality. Smaller networks, however, force consumers to accept whatever is available. Smaller networks allow the insurance carriers to call the tune.
The New Mexico Health Security Act deals with the issue of restricted networks head-on. With the Health Security Plan, patients would be free to see any New Mexico medical professional they choose to. There would be no networks. The Plan would also contract with providers across state lines, including specialty centers like the Mayo Clinic, adding an even broader range of choices.
In our next post, we will focus on market competition—a fundamental principle both for those who oppose the Affordable Care Act and for those who argue that the ACA maintains a competitive insurance model.