One of the consumer complaints levied against Affordable Care Act (Obamacare) health plans is that their provider networks are often narrow,1 creating both a high ratio of patients to doctors2 and increasing the risk for out-of-network care.3 With respect to out-of-network care, when enrollees go out-of-network for healthcare, many Obamacare plans will not cover the costs except in the case of a medical emergency or if a prior authorization from the plan had been formally submitted and then approved by the health plan. Moreover, unlike in-network healthcare, out-of-network medical care does not have its annual costs capped by the Affordable Care Act to prevent catastrophic medical expenses.
Given the increased potential for out-of-network care within the context of narrow networks, HealthPocket examined government data on Obamacare individual & family plans in the 37 states that use Healthcare.gov to determine the percentage of marketplace plans that offered out-of-network coverage. Overall, 52.6 percent of Obamacare plans on Healthcare.gov had out-of-network coverage, leaving nearly half of plans without easily accessible out-of-network coverage. As previously noted, Obamacare plans without out-of-network coverage do not pay for out-of-network healthcare unless the enrollee has a medical emergency or obtains prior authorization from the plan before receiving out-of-network healthcare.
The percentage of Obamacare marketplace plans offering out-of-network coverage in each state ranged from 0 percent in South Dakota to 100 percent in Alaska, Alabama, Louisiana, Tennessee, and West Virginia. Across the 37 states that use Healthcare.gov, there were eight states in which less than 33 percent of marketplace Obamacare plans covered out-of-network medical bills: South Dakota (0 percent), New Jersey (10.2 percent), Nevada (14.6 percent), New Mexico (18.2 percent), Utah (18.5 percent), Maine (18.9 percent), Wisconsin (20.8 percent), and Texas (32.6 percent). In 13 states, less than half of plans offered out-of-network coverage.
Given that Obamacare plans operate according to government regulations on plan benefit design and cost-sharing, they invite comparisons with the Medicare program. For Original Medicare Parts A and B, enrollees can see any health care provider that is enrolled in the Medicare program. The same applies to Medicare Supplement coverage. A 2013 study by the Kaiser Family Foundation found that over 9 in 10 doctors accepted Medicare insurance coverage.4
Network access for Medicare beneficiaries becomes more limited for those who choose to enroll in Medicare Advantage health plans with formal healthcare provider networks. For HMO plans, enrollees are normally restricted to in-network providers except in emergency medical events. For PPO and PFFS plans, enrollees typically have access to out-of-network healthcare providers at a higher cost-sharing rate.
A recent survey from the Deloitte Center for Health Solutions found approximately one-in-five exchange enrollees surveyed thought that their health plan network was too limited.5 The same study found that 67% of health insurance exchange buyers surveyed cited the provider network of a health plan as a factor important to their insurance choice.6 What is unclear at the present time is whether more Affordable Care Act insurers will be able to offer new plans in the future that achieve the price point necessary in the individual health insurance market while satisfying consumer concerns over network breadth and coverage of out-of-network care.
70 percent of Obamacare marketplace enrollees are dissatisfied with their Obamacare plans, compared to 52 percent of Medicaid enrollees and 42 percent of Medicare enrollees.7 Wanting broader coverage is one of the main complaints that Obamacare marketplace consumers have cited for switching plans.8 HealthPocket found that only 52.6 percent of plans on the federal Obamacare marketplace covered out-of-network providers. In 8 states on the federal marketplace, less than 33 percent of marketplace Obamacare plans offered out-of-network coverage.
Although Medicare health plans are required to reimburse out-of-network providers, HealthPocket found that there were only 5 states on the federal marketplace in which every Obamacare marketplace plan had out-of-network coverage. For consumers dissatisfied with the network coverage in their marketplace Obamacare plans, there are alternatives for health insurance such as buying an off-exchange Obamacare plan or a term health insurance plan.
Out-of-network coverage data was obtained in September 2015 for on-exchange Obamacare individual & family plans in the 37 states that use healthcare.gov. Data for on-exchange plans was obtained from the 2015 plan attributes public use file from CMS CCIIO.
Plans that covered providers outside of the provider network were counted as having out-of-network coverage, unless the plan only offered out-of-network coverage for enrollees with emergencies or prior authorization from the plan. The analysis assumed the accuracy of the underlying government data.
This analysis was written by Jesse Geneson, data scientist at HealthPocket. Correspondence regarding this study can be directed to email@example.com.
1 Brett Norman. “Anger Over Narrow Networks.” Politico. (July 22, 2014). http://www.politico.com/story/2014/07/obamacare-health-care-networks-premiums-109195. Last accessed October 1, 2015.
2 “The ACA establishes federal standards for network adequacy, but state and federal regulators should consider patient-to-physician ratios and the use of out-of-network clinicians when determining the adequacy of future health plans, ACP wrote Tuesday in a letter to Health and Human Services (HHS) Secretary Kathleen Sebelius.” David Pittman. “Fix Narrow Networks, ACP Tells HHS.” MedPage Today. (February 11, 2014). http://www.medpagetoday.com/PublicHealthPolicy/Washington-Watch/44261. Last accessed September 30, 2015.
3 Bob Herman. “Network squeeze: Controversies continue over narrow health plans” Modern Healthcare. (March 28, 2015). http://www.modernhealthcare.com/article/20150328/MAGAZINE/303289988. Last accessed September 30, 2015. See also: Elisabeth Rosenthal. “Insured, but Not Covered.” New York Times. (February 7, 2015). Last accessed September 30, 2015. Dan Mangan. “Obamacare health plans: Enough Doctor Choice?” CNBC. (July 16, 2015). http://www.cnbc.com/2015/07/16/obamacare-plans-offer-narrow-health-provider-options-study.html. Last accessed September 30, 2015.
4 Christina Boccuti et al. “Medicare Patients’ Access to Physicians: A Synthesis of the Evidence.” Kaiser Family Foundation. (December 10, 2013). http://kff.org/medicare/issue-brief/medicare-patients-access-to-physicians-a-synthesis-of-the-evidence/. Last accessed October 1, 2015.
5 Gregory Scott, Paul Lambdin, Rod Kleinhammer. “Public health insurance exchanges.” Deloitte. (2015). p.19. http://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/health-care-consumers-health-insurance-exchanges.html. Last accessed October 1, 2015.
6 Ibid. p. 8 Figure 1.
7 Gregory Scott, Paul Lambdin, Rod Kleinhammer. Public health insurance exchanges. Deloitte. http://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/health-care-consumers-health-insurance-exchanges.html
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