Where have all the doctors gone? Beware of health exchange networks.

Credit: Boston Public Library via Flickr under Creative Commons

Have you signed up for a plan at the New York State of Health Insurance Exchange yet? When you signed up did you take a look to see if your doctors were covered under the plan you picked? If you didn’t chances are they’re probably not and the same goes for hospitals. But why are insurance companies trimming down their health exchange networks? Let’s explore.

Keeping costs down by shrinking health exchange networks

The Affordable Care Act (ACA), puts a lot of pressure on health insurance companies to keep their rates low and affordable for consumers. The federal government has doubled down on this pressure, as they continue to struggle to make the exchanges and the plans they offer more appealing to customers. Not to mention all the new taxes.

The primary way that insurers are cutting costs, is by excluding certain doctors and hospitals from their health exchange networks. According to some companies, their research showed that customers preferred cheaper health plans with smaller networks, than more expensive ones with bigger networks.

This has resulted in dangerous coverage gaps. In New York City, for example, many of the city’s hospitals are only participating in two or three health exchange networks, which makes emergency coverage a bit of a patch work. It should also be noted that all New York Health Insurance exchange plans do not provide coverage for any out-of-network benefits.

Reimbursement

Insurance companies are also offering lower reimbursement rates to doctors, which is making them think twice about joining an exchange plan. According to anecdotal evidence, some companies selling at the exchange tried to recruit doctors for their network with reimbursement rates even lower than Medicare. Typically Medicare reimbursement rates are the lowest in the industry.

The argument health insurance companies make is that lower reimbursement rates will be offset by the number of new patients doctors will have access to. But doctors’ days are already booked solid as it is with current patients, never mind adding new ones, and don’t forget about the predicted doctor shortage.

Opting out

In response to these lower rates for more patients, most doctors in New York State are opting out of health exchange networks, or even worse they don’t know if they’re participating in an exchange plan. Some doctors’ contracts with health insurance companies are arranged so it’s difficult to tell what plans they are signed up for. In those cases doctors are automatically enrolled by the insurer to participate in a plan unless they actively say no.

A survey from the Medical Society of the State of New York given to its members reveals that 44 percent said they are not participating in any exchange plans, while 33.5 said they don’t know if they’re participating.

What you can do

While the exchange plans in New York State have their upsides, like health insurance subsidies and mandated essential benefits, they come with the downside of small networks. That reduced network size can make all the difference in an emergency situation. The best course of action is to simply pick up the phone and talk to the insurance company in question about their network before deciding on a plan.