Seth Chandler, a law professor at University of Houston’s Health Law Policy Institute, put it even more bluntly: “It’s dramatic that the fourth-largest city in the country does not have a PPO.”
In 2015 there were 19 PPOs available in Harris County, 12 from Blue Cross Blue Shield and seven from Cigna Health Insurance, Chandler said. Now there is none.
“We found that the individual PPO plan was no longer sustainable at the cost it was being offered,” the company (BCBS) said. “Because we want to make sure that our plans are affordable, we decided to not offer individual PPO plans in 2016.”
Insurers limit plan types for 2016 ACA exchange
By Jenny Deam
October 27, 2015 Updated: October 27, 2015 10:50pm
Last summer, Brenda Hebert got a letter from her insurer, Blue Cross and Blue Shield of Texas, that it would no longer be offering her Preferred Provider Organization plan on the federal marketplace exchange for 2016.
Although irritated, Hebert reassured herself she would simply find a PPO plan with another insurer when enrollment opens on Sunday. That way, even if she changed carriers her doctors would still be covered.
But on Monday night, as she logged onto the Health and Human Services website to get a preview of the offerings, she discovered that not one company is offering a PPO plan in the Houston market on the legally mandated exchange.
“I don’t know what I’m going to do,” she said Tuesday morning as she contemplated the scramble to find new coverage in a Health Maintenance Organization Plan, a type of insurance plan she specifically does not want and fears will limit her choices of doctors. “I don’t want to lose the doctors I have been going to for 20 years.”
But insurers counter that continuing to offer the PPOs, even though they often cost consumers more, no longer makes business sense.
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Traditionally, HMOs cost both insurers and customers less, so they can be appealing to the bottom line. However, some worry such cost savings may limit health care choices and even impact access or the quality of care as hundreds of thousands of Texans are shifted from one type of insurance plan to another.
With enrollment for the 2016 Affordable Care Act marketplace just days away, the decision by insurers in the Houston area to drop all PPO offerings came as a surprise to more than just customers. Even policy experts who closely watch the implementation of the ACA were taken aback.
“I knew there would probably be some pullback, but I thought it would come in terms of premium increases, not pulling the entire product off the market,” said Vivian Ho, chair of Health Economics at the Baker Institute and economics professor at Rice University.
Seth Chandler, a law professor at University of Houston’s Health Law Policy Institute, put it even more bluntly: “It’s dramatic that the fourth-largest city in the country does not have a PPO.”
Instead, based on data from the Healthcare.gov planning tool, it appears that insurers in the Houston area are offering only HMO plans or the rarer EPO (exclusive provider organization) plans for those signing up for individual coverage on the exchange.
In 2015 there were 19 PPOs available in Harris County, 12 from Blue Cross Blue Shield and seven from Cigna Health Insurance, Chandler said. Now there is none. He and others say the advantage many customers find in PPOs are wider choices of doctors, especially for those with the greatest medical needs who seek specific doctors for specialty care.
In addition, in 2015 there were 17 Point of Service plans in Harris County offered by Aetna and Humana. Those type of plans also tend to offer greater choice of doctors, he said. Those, too, are gone in 2016.
And the number of platinum plans, the most expensive of the choices on the exchange, has shrunk from three to one in the Houston area.
In July, Blue Cross Blue Shield of Texas, the state’s largest insurer, sent a letter to its PPO customers noting, in part, that “the market has changed” since the Affordable Care Act was implemented.
“We found that the individual PPO plan was no longer sustainable at the cost it was being offered,” the company said. “Because we want to make sure that our plans are affordable, we decided to not offer individual PPO plans in 2016.”
Humana issued a similar explanation on Tuesday in an emailed statement to the Chronicle: “Humana chose to no longer offer preferred provider (PPO) plan options on the Marketplace in Texas for the 2016 plan year in order to retain the overall affordability and access of the individual health plans offered by Humana.”
Attempts to reach Cigna and Aetna for comment were unsuccessful.
How widespread the trend of shifting to HMOs is unclear. Chandler said his quick check on the Health and Human Services website showed that the number of PPOs in Dallas County fell to nine, from 21. All nine available plans were offered by Scott & White Health Plan, which does not serve the Houston area.
Elsewhere, there is scattered anecdotal evidence that the shift away from the more expensive and expansive PPOs to HMOs may be occurring, said Cynthia Cox, associate director for health reform and private insurance at the Kaiser Family Foundation in Washington, D.C. She said she has heard recently that New Mexico no longer had any PPOs plans on its state exchange, and in D.C., the number of PPO plans dropped to one, from two.
“In an HMO it’s easier for an insurance company to control costs and predict what costs will be,” Cox said Tuesday. She added the HHS data was so new her organization had not had time to fully analyze the numbers.
Nor had Ken Janda, president and CEO of Community Health Choice, a Houston-based managed-care organization that offers only HMOs. While he says he cannot speak for insurers that dropped PPOs, he does not see the shift to HMOs as a bad thing for consumers who gravitated to the lower-cost plans in the first two years of enrollment.
“What carriers have seen is price is the most important consideration for consumers in the past,” he said, adding that such changes are part of the overall evolution of the ACA.
What pleases him most is that the price differences from 2015 to 2016 are negligible in most plans. In 2015, the lowest-priced silver plan for a typical 27-year-old was $203 without a subsidy. For 2016, the lowest-price silver plan, from a different carrier, is $207.
Ho acknowledged some customers are not going to be happy about the change.
“It is unsettling to find a new provider,” she said.
Plus, she added, “the sicker you are and if you don’t qualify for a subsidy, you may have a harder time finding a plan.”
But she added that the goal of the ACA was to get more people covered and keep costs down. Most people who are on the exchange are being subsidized by taxpayers, so not getting as wide a choice of doctors “might be the price they have to pay.”
Chandler was critical that the lofty promises of the ACA that everyone could keep their doctors clearly are not being kept, but he finds a silver lining in people finding lower-cost insurance, even if they have to switch to other plans.
“Because it doesn’t do precisely what it was advertised to do might be in a weird way better,” he said.
See article here: http://www.houstonchronicle.com/business/medical/article/Insurers-limit-plan-types-for-2016-ACA-exchange-6594447.php
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