Most exchange plans are narrow network plans. This means hospitals and doctors are excluded from the plan due to either pricing or corporate strategy. Expensive providers are culled if there are nearby options that are cheaper. This is leading to really good premiums as comparable Exchange plans are coming in under group health insurance premiums. The trade-off is restricting choice to only providers that are willing to reduce their prices.
Washington State starkly illustrates this trade-off as the Seattle Children’s Hospital was excluded from
all most of the narrow network plans on the Washington State Exchange initially.
The Monterey Herald has a good explainer:
Left out are hospitals such as Seattle Children’s, excluded from five of seven plans on Washington’s state insurance exchange.
The hospital, which has sued the state to be included in more plans, is struggling to get paid for care given to about 125 children since Jan. 1…
Seattle Children’s Hospital, for instance, sued the Washington Office of the Insurance Commissioner…
the state responded that “nothing in the law dictates inclusion of a specific provider, regardless of their preeminence or sympathetic patient base. So long as issuers meet the legal standards for adequacy and covered services, the OIC does not manage their business arrangements for them….”
The hospital, meanwhile, counters that the uniqueness of its services and the training required by its doctors to carry out patient care deserve more compensation.
“We take care of a very unique group of children, and the amount of resources we need to have is very expensive,” Melzer said. “We do 100 percent of transplant care and 70 percent of cancer and cardiac care in the state….
“The cost of Children’s non-unique inpatient services is 100 percent higher than such services at other hospitals in our statewide network,” he [Earling, Insurance Company spokesman ]said.
A pediatric appendectomy, which cost $23,300 at Seattle Children’s, is priced at $14,100 at Premera’s other in-network hospitals, Earling said, adding: “The issue, at the end of the day, is access at a more affordable price. That’s why their non-unique services are not covered.”
Rebekah Blankers [mother of child with unique diagnosis that can be treated at Seattle Childrens’] isn’t waiting to find out what Premera considers unique or non-unique. She has switched Gabriella to a …plan that will cover all care done at Seattle Children’s. ..the rest of the family…will stay on the less-expensive LifeWise plan.
There are a lot of issues going on here which we’ll take a look at below the fold: