Cost crucial for uninsured sign-ups looking for health coverage
Morey, who has had no health coverage since 2008, said he was not concerned that he wouldn't be able to go to most UPMC hospitals or see doctors in the region's largest health system.
The decision came down to cost. Community Blue's low monthly premium, the lowest in Western Pennsylvania, “was absolutely one of the deciding factors,” said Morey, who's paying $20 a month for Community Blue, thanks to $148 in monthly tax credits.
Thousands of consumers in the Pittsburgh area have made the same choice in the last three months. Highmark, the state's largest health insurer, dominates the online insurance marketplace formed under the Affordable Care Act with its low-cost, limited-network plans.
Insurers across the country are doing the same as they try to lower prices by offering plans that exclude some hospitals.
When it comes to individual insurance shoppers, especially those with lower incomes who are primary customers on HealthCare.gov, cost is the most important factor, said Karen Pollitz, a senior fellow at the nonpartisan Kaiser Family Foundation in California and an expert on health insurance.
“The individual market is very, very price sensitive,” Pollitz said.
The Affordable Care Act outlawed many of the ways health insurers previously lowered the cost of individual policies, such as not covering some medical conditions or setting annual limits on payments. Excluding more expensive hospitals is one of the few strategies left to insurers.
“This is the next easiest thing to manipulate,” Pollitz said.
A survey of health plan offerings in 20 marketplaces in large urban areas by McKinsey & Co. found last month that “narrow and ultra-narrow networks are more prevalent,” constituting 70 percent of health plan networks. McKinsey, a management consulting firm, found that broad network health plans were 26 percent more expensive on average than plans with narrow networks.
“Carriers are adapting to affordability imperatives by actively excluding some higher-cost hospitals while collaborating more closely with those willing to accept lower reimbursement rates,” the McKinsey report said.
Community Blue plans are 30 to 40 percent cheaper than offerings from its competitors, UPMC Health Plan and HealthAmerica, a subsidiary of Aetna Inc. The plans cost about 25 percent less than Highmark plans that do offer in-network access to UPMC hospitals and doctors.
For a 30 year old, premiums for Community Blue plans range from $129 to $183 depending on the level of coverage.
“That's a very clear way to lower costs, by having UPMC out of network,” spokeswoman Kristin Ash said. “We know very clearly that UPMC's costs are the highest in the region.”
UPMC also offers limited-network plans, which include all UPMC hospitals and “some community hospitals” in Allegheny, Beaver, Butler, Washington and Westmoreland counties. UPMC's Select plans cost between 7 percent and 17 percent less than its broader network plans.
All medical services outside the five-county area are charged at more costly out-of-network rates, except for emergency room visits, UPMC Health Plan spokesman Bill Modoono said.
Modoono declined to list which community hospitals were included in the network and which were not.
Insurance companies aren't always transparent about which facilities and doctors are out of network, Pollitz warned. Shoppers should check with the company about specific facilities before buying a plan, she recommended.
More than 37,000 people in Pennsylvania selected a Highmark plan on HealthCare.gov between Oct. 1 and Jan. 13, Highmark said this week. That's nearly half the 81,000 people statewide who selected any plan on the website, as of Dec. 28. And 80 percent of people in Western Pennsylvania selecting a Highmark plan chose Community Blue, the insurer said.
In addition to premium cost, Morey selected Community Blue because he hadn't had insurance in five years and had no relationship with local doctors.
“I already tested out my plan. I found a doctor and went for a physical,” Morey said. “I live in Bloomfield and I'm close to West Penn Hospital. ... It's better to have an affordable plan than pay $100 a month for a UPMC plan,” he said.
But for Barb Valaw, keeping access to her primary care physician, who's employed by UPMC, was paramount when she went shopping to replace a previous health plan that was canceled by Highmark because it didn't meet the more robust standards of the Affordable Care Act.
The 53-year-old independent contractor from Carrick said, “I wanted to duplicate my coverage and keep my doctors.”
Titus North, a certified application counselor with the Squirrel Hill consumer advocacy group Citizen Power, has noticed the same trend: People who previously had insurance are likely to have UPMC doctors and are not choosing Community Blue.
But, North said, most of the people he has helped to buy plans are new to health insurance, don't have doctors and are selecting Community Blue based on cost.
“They work very well for people who have not had insurance because they don't have doctors,” he said. “If you're going from nothing to Community Blue, it can be good.”
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.