Insurers’ Latest Dodge to Not Cover You when You Need It: The Incredible Shrinking Network

Today’s must-read Seattle Times article by Carol M. Ostrom and Amy Snow Landa (interactive graphic here and comparison table here) prompts me to write about a huge problem with American health insurance that I’ve been banging against quite personally in recent months.

Excerpts below give an idea what an important article this is. My thoughts:

Insurers are actively eliminating must-have hospitals from their networks, while imposing unlimited out-of-pocket charges for out-of-network services. If the provider you need (a pediatric or major-trauma hospital for instance) isn’t in your insurer’s network, you could face financial ruin even though you’re insured.

I’ve been deep in the individual health-insurance shopping game recently, shopping for myself in Washington State and for my 22-year-old daughter in Illinois. I even built a web app to compare total costs of different health plans, because there’s really no way to compare them without such a tool.

It’s incredibly complex, with all sorts of interacting variables to evaluate. I can’t imagine how someone without my analytical skills (and time to use them) could even begin to do a good job of it — protect themselves effectively and suss out the best deals to do so. Most would have to throw up their hands and throw a dart.

To be a smart shopper in this market, you have to be very smart, and have lots of time on your hands.

That pretty much describes me — the Republicans’ dream shopper, out there driving down insurance prices by comparing and carefully evaluating all the competition and choosing the best deal.

But even I have been completely flummoxed by one big issue: how do I evaluate the networks of providers offered under different insurers and plans? Sure, I can look to see if my doctor’s covered. Great. Big deal. But what if I have a major auto accident? Is Harborview (Seattle’s top-flight regional trauma center) covered? How about Children’s Hospital, our pediatric mecca? (Not an issue for me these days, but…) The Swedish Hospital system? (Top-rated for ER intake times, the place I would go for a medium emergency.) Seattle Cancer Care Alliance? (This is the outfit you’re gonna want if you face that horror.)

One and only one insurer in Seattle covers all those providers in-network. Most cover none of them.

Ostrom and Landa have done the legwork for us here in Seattle. If you’re elsewhere…sure: you can evaluate this — by going to every single insurer’s site, figuring out which of their often-multiple networks a particular plan supports, then successively searching those networks for all the possible providers using their little web tool, one provider after another, one insurer after another, and building yourself a table.

It’s basically like playing Battleship.

Realistic? Even if you could predict, in advance, what providers you might need someday (and you’re savvy enough to know which providers in town are important), we’re talking hours of work to check whether each plan covers them.

Here are the crux paras from Ostrom and Landa’s article:

The Seattle Times asked the seven insurance companies selling individual policies in the exchange in King, Pierce and Snohomish counties to list their in-network hospitals.

The results show that only one — Community Health Plan of Washington — includes Seattle Cancer Care Alliance, which offers treatment for some of the most complex cancer cases in the region.

Four of the seven insurers do not include the University of Washington Medical Center or the UW’s Harborview Medical Center — which has the state’s only Level 1 trauma center and burn unit.

Community Health includes every major hospital in King, Pierce and Snohomish counties, but is the only exchange insurer that does.

By contrast, Premera and its subsidiary, LifeWise Health Plan of Washington, include many major hospitals, but not the largest Seattle-area hospitals in the two major medical systems — Swedish and UW Medicine.

Let’s be very clear here: Premera and  Lifewise, two of the state’s biggest insurers, provide in-network coverage for none of the important hospitals I listed above. Not Children’s (pediatric). Not Harborview (major trauma).

Meanwhile many, most, or all of their plans have no limit on your out-of-pocket costs for out-of-network providers. If you have a serious illness or injury, you could be financially ruined even though you’ve got insurance.

This part really, really pisses me off:

Coordinated Care CEO Dr. Jay Fathi said the company would use “single-case agreements,” which he likened to an invoice or a bill. The hospital sends the bill to the insurer, who pays it, a system he said functions “fairly smoothly.”

Children’s officials say such agreements are quite rare and are generally limited to patients who are out of network because they live outside the local area. Resorting to single-case agreements, they said, would likely delay care for patients.

In other words, “Trust us. We’ll cover you if you need it.” (Yeah, and I’ve got a bridge for sale.)

This also points out that exposure to out-of-network charges, traditionally much more of a problem in rural counties, has now come home to urban dwellers. Seattle has traditionally been seen as a really great place to get sick — great providers with ample access.

That’s no longer true if you’re buying individual health insurance.

Cross-posted at Angry Bear.



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2 responses to “Insurers’ Latest Dodge to Not Cover You when You Need It: The Incredible Shrinking Network”

  1. […] as the hospitals that are in-network for those companies. Pivoting off of that list, Steve Roth points out that two of Washington’s biggest insurers–Primera and Lifewise–don’t have any of […]

  2. barleysinger Avatar

    For some reason the insurance companies of the US have had a ‘golden ticket’ with the feds for a long time. Recall that although it was illegal for a long time for you car insurance rates to increase if you were not at fault in an accident – no matter HOW Completely you were not at fault :

    * your car was stolen while locked up in your garage and was left gutted 200 miles away
    * you car was parked in your driveway and a drunk driver without insurance(or even a drivers license) drove into your living room and totaled you car in the process

    If you claimed at all, they still raised your rates. You were punished for the actions of other people (even illegal ones), and they claimed that it was because it would not have happened at all unless you engaged in an at risk behavior.

    Healthcare has always been the worst – the outright nastiest. Long before the HMO existed (organizations that lie to patients about their conditions and about the current available treatments – just to keep costs low) … in the older days they would still just *change their minds* about what was covered – often after verifying with the hospital that you WERE covered for a surgery (all legal).

    Recall here that Insurance companies were the first financial entities in the USA who were allowed to rewrite any contract with a customer without even telling them. They did not need to send you any notice of the changes or get a new signature.

    Anyone here recall basic contract law? You need an agreement BEFORE HAND and an exchange of goods, services, etc to seal the deal – but they were made exempt.

    Let us never forget what gave the US health insurers that taste of blood for higher profits – In the Regan era they were deregulated. For some reason Republicans seem to believe that greed make people more socially responsible and less likely to do terrible and wrong things.

    The that health insurance companies were legally required to keep untouched in low risk investments (to ensure they could pay their claims) – all that regulation was removed. As a result they all invested ALL of it in ‘junk bonds’ and lost it. This is why my own policy with Blue Cross Blue Shield in Washington went from about $60 a month *I had very good coverage and not through my employer) suddenly went up to $450 a month for less coverage over about 2 years time. It was claimed this was necessary in order to rebuild the base cash reserves for the paying of claims. For some reason they never did lower those rates – they just kept climbing. Meanwhile massive bonuses were paid to execs, the high rates continued (and still do now) to go upward and the coverage dwindled.

    This is why countries need both a private and a public system. The private medical and insurance system gives people higher quality, newer methods and fast access. Whereas the public system gives people the ability to NOT DIE if they are poor or uninsurable and also keeps the private healthcare system’s prices far lower. In 1999 the cost of a prescription I needed for my wife was $50 a month after insurance. In Canada it was free. In Mexico it was about $30 US. In Australia it is currently about $35 for a healthy person to get the same medication, and they have higher prices than many other nations due to their low population.

    When everything is private, everyone who provides ANYTHING to a medical provider views them as a cash cow; they act like every doctor and every hospital is a bottomless fund – a well spring of endless gold. Pills that cost the rest of the world’s healthcare consumers 1 cent or less each, often cost US citizens $3.00 or more per pill (even when they came from the same factory and have the same lot number on them).

    At least 80% of private bankruptcies in the USA are from medical bills. When my wife miscarried in the 2 days between insurers (I was changing jobs and could not Cobra) it cost us over $12,000; that was the fee for our 2 emergency room visits and for a surgery that cost about $200 anyplace else).

    Meanwhile other nations with far better economies than the USA have have had public medical care for a century.