Healthcare Access – New Concerns for Obamacare Exchange Plans
Jim Jones, President, Wellspring Benefits Group
A 2014 survey by the Medical Group Management Association, a consortium of independent practice associations (IPA’s) and multi-physician medical practices, offered an alarming unintended consequence of Obamacare. The survey, taken as of May, 2014, estimates over 214,000 doctors will not participate in the Affordable Care Act (ACA) exchange plans going forward. This number appears to be growing as more physicians experience the unsustainably low reimbursement rates, increased risk of non-payment and excessive regulations and administrative requirements associated with ACA. According to the Kaiser Family Foundation, there are approximately 894,000 practicing physicians in the U.S. The simple math would indicate at least 25% of physicians nationwide are opting out of accepting Obamacare plans with more expected in 2015.
What’s even more alarming is what’s happening in the state of California. It’s estimated that 70% of California’s practicing physicians are not participating in Covered California1 (ACA exchange plans). There are people all over California paying premiums for ACA exchange plan health insurance and have little or no access to care.
Let’s look at the major causes of physicians opting out:
1. Reimbursements to physicians accepting ACA plans are at an all-time low. It’s estimated that where private or employer sponsored plans pay $1 for a service, ACA exchange plans are paying about $0.602. So in effect, ACA exchange plans are cutting physician reimbursements by up to 40%. Over 7 million consumers have purchased exchange plans3, many after not having health insurance for years. These patients appear to be utilizing their plans more frequently due to previously untreated conditions. Physicians, in turn, are spending more time treating more patients and being reimbursed at rates that cannot support their overhead.
2. If you purchase private health insurance (not on the federal or state exchanges) and you stop paying your premiums, you have a 30 day “grace period” before your coverage ends. If you pay your premium in the first 30 days, your coverage continues. If not, you no longer have insurance. However, ACA exchange policies are under different government rules. Insurance companies have to cover ACA consumers for an additional 90 days after they have stopped paying their premiums. The insurance company still covers the first 30 days but it’s up to the doctor to recoup payment for the next 60 days. Currently, over a million people have stopped paying their ACA premiums. So doctors are treating patients for months that have stopped paying premium but must still continue to treat them. If the patient is unable to pay, the doctor has no way of being compensated for potentially months of service.
3. For those consumers that qualify for a federal subsidy, many have chosen the lowest cost “metal” plan (Bronze) which has a high deductible. Many of these consumers are in lower income households or don’t understand their benefits and rack up thousands of dollars in cost before the deductible is met – once again leaving the physician in a position to not get compensated. So, physicians are asking themselves a simple business question when it comes to ACA exchange plans, “Am I willing to take sicker patients for significantly less money with the risk of not getting paid at all?”
4. If physicians accept Obamacare exchange policies, they must also accept the mandatory regulation and administrative overhead of ACA compliance. There are stringent administrative procedures for data capture, reporting, documentation and compliance of electronic health records that must be a part of each physician office. While the ultimate goal is to improve communication and help patients, the regulations were written by federal bureaucrats that have no understanding of what it takes to run a medical practice. Since these requirements must be met and there’s only so many hours in a day, the outcome is a significant decrease in the amount of direct contact with patients and more administrative overhead that must be absorbed by the physician.
So what does this mean to consumers who purchase ACA exchange plans? First, it’s very possible that the network associated with your ACA plan will be very limited in physician and hospital choice. It’s also possible that more physicians will be leaving these already limited plans putting more consumers at risk of finding a local provider. As a consumer, you need to understand the upside and downside of ACA plans. You may get a subsidy which lowers your premium (upside) but you may have limited choices in physicians and hospitals (downside). Having access to healthcare, no matter how much the subsidy lowers your premium, is still a major factor in the value you get for the money you pay.
There are some solutions. One of the most convenient and inexpensive ways of accessing healthcare for routine, non-emergency illnesses, is telemedicine. Telemedicine provides unlimited access to physician consultations by phone with a board-certified doctor who will diagnose your condition and if needed, call in a prescription to your local pharmacy. It alleviates an office visit and the out-of-pocket fees involved in physically going to the doctor’s office. And since telemedicine does not rely on a “network” like your insurance plan, you have access 24/7 on your terms. In the past, telemedicine has been mainly available only through employer or affinity groups. Today, individuals and families can get telemedicine for a fraction of the cost of paying out of pocket for routine healthcare. Many other products and services are available that can help lower out of pocket costs in addition to telemedicine. These products and services become more valuable as consumers experience the unintended consequences of Obamacare.©
About the Author: Jim Jones is President of Wellspring Benefits Group located in Colleyville, Texas. He is a visionary leader with an eye for emerging markets in a changing healthcare environment. Through Jim’s 30 years in the insurance and healthcare business, he has developed a business model that integrates insurance products and healthcare services for individuals and small businesses to manage their costs and coverage with customized plan options. Jim can be reached at firstname.lastname@example.org.
1 Richard Pollack, Doctors Boycotting California’s Obamacare Exchange, Washington Examiner (December 6, 2013); available at http://washingtonexaminer.com/doctors-boycotting-obamacare-exchange/article/2540272.
2 Roni Caryn Rabin, Doctors Complain They Will Be Paid Less by Exchange Plans, Kaiser Health News (November 19, 2013); available at http://www.kaiserhealthnews.org/stories/2013/november/19/doctor-rates-marketplace-insurance-plans.aspx
3 Sam Baker and Sophie Novack, 7.3 Million People Have Obamacare Coverage, National Journal (September 18, 2014); available at http://www.nationaljournal.com/health-care/obamacare-enrollment-drops-to-7-3-million-20140918
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