Tens of thousands of Western Pennsylvanians shut out of UPMC and Highmark’s freshly inked deal don’t have much say in the health insurance plans they get — workers under 65 who rely on the coverage options their bosses choose.
Kindergarten teachers, state troopers, pharmacists, municipal employees, community college professors, sales associates, union workers and nurses are among those who do not stand to benefit from the 10-year contract in place between the competing Pittsburgh-based health systems.
They share in common employer-sponsored plans branded “narrow network.”
Such plans — including Highmark’s Community Blue offerings — restrict access to certain doctors and hospitals in exchange for lower price tags paired with relatively attractive perks.
“It’s very disturbing that this one plan was carved out,” said Georgie Blackburn of the Alle Kiski Strong Chamber of Commerce and Blackburn’s Pharmacy, whose fellow 189 employees in Tarentum, Bridgeville and Erie have Community Blue plans that exclude UPMC facilities in the region. “Enough employers have it that it’s a concern.”
Employers from the Alle-Kiski Valley to Downtown Pittsburgh to Monroeville have opted in the past year to offer narrow-network plans.
They appeal to managers because the option pairs lower price tags with relatively attractive perks, several insurance brokers and business owners told the Tribune-Review. Cash-strapped public agencies, startups and businesses with fewer than 100 employees are some of the restrictive plans’ biggest clients.
There are no clear indicators that the deal facilitated by Pennsylvania Attorney General Josh Shapiro will do anything to change that.
The dilemma has left employees feeling helpless about their health care choices and lamenting that nationally ranked specialists and new facilities popping up in their own neighborhoods may be off limits unless it’s an emergency.
Constrained by employer choice
Two months after Shapiro lauded UPMC and Highmark for striking a private agreement, frustration lingers for patients who realized they’re not among the more than 1 million people who are guaranteed access at in-network rates to both systems from the deal. Some were told they would be covered after the agreement only to learn days later they were not.
“Have you heard the news?” begins a UPMC radio spot that ran several times in the past week. “Now, we can connect you with the UPMC doctors you prefer and the nationally recognized care you want. …”
“The general public, unfortunately, has some belief that by the new arrangement, all Highmark plans have UPMC access and vice versa, and that’s not the case,” said Robert Nelson, an insurance broker based in Ambridge, Beaver County, who specializes in helping small businesses.
The privately negotiated contract, which runs through July 1, 2029, guarantees both Highmark and UPMC the right to continue to grow and roll out more narrow-network offerings.
“Narrow network means lower premiums, and for the employees that work for companies that have narrow-network plans, they have no other choice,” Nelson said.
Highmark’s Community Blue plans will continue to exclude UPMC facilities in the region — including UPMC St. Margaret, Mercy, Shadyside and East (Monroeville) hospitals as well as outpatient centers and Hillman Cancer Center locations in Allegheny and Westmoreland counties.
UPMC spokesman Paul Wood said that “people should not be fooled by the narrow network offerings.”
“People look at this and say, ‘OK, here’s a Blue Cross/Blue Shield product, I’m good’ — maybe not, if you’re narrow network,” Wood said. “Employers should make sure that they’re making it possible for their employees to see the doctors they want.”
For its part, all UPMC insurance plans are narrow network in that they exclude Highmark’s Allegheny Health Network facilities, with two exceptions: St. Vincent Hospital in Erie and Jefferson Hospital in the South Hills.
Highmark executives say that their narrow-network plans have been growing in popularity in recent years.
Highmark Health CEO David Holmberg emphasized that under the new contract, a majority of “patients now have two outstanding health care systems to choose from and to go see for their care, in addition to our many independent community hospitals across our region.”
61K school employees blocked from local UPMC care
Those excluded from getting affordable access to both Highmark’s Allegheny Health Network and UPMC providers include more than 61,000 employees who work in education jobs across Allegheny, Beaver, Butler and Washington counties.
The group ranges from custodians to principals to district administrators in all but two Allegheny County school districts and neighboring areas.
Their coverage is chosen by a 24-trustee consortium via the Allegheny County Schools Health Insurance Consortium. The consortium spans 71 school districts, vocational schools and three community colleges.
The group switched to a Highmark Community Blue flex plan in 2015 and renewed a similar one this past spring.
“Those narrow-network plans existed before the consent decree, and they were going to exist after,” Shapiro told patients during a visit to Pittsburgh a week after he announced the deal and dropped his months-long litigation against UPMC.
Some patients on narrow-network plans, however, had been able to go to most UPMC facilities up until June 30 — under a “continuity of care” provision folded into a state-brokered consent decree between the longtime rivals that expired July 1. That’s the same day the new contract took effect.
Nancy Myers, a Fox Chapel Area School District employee who lives in Sharpsburg, learned that she and her husband no longer would have access to the UPMC Heart & Vascular Institute or UPMC St. Margaret hospital near Aspinwall. She and her husband, Joe, are working on switching doctors they had been able to see through the end of June.
“Here’s our difficulty: The announcement was at the end of June, and no one expected that possibility,“ said Walter Michalski, member of the consortium board . “As we saw the split coming down the pike, we chose to go with Highmark because … Highmark was willing to be flexible in terms of what we needed.
“There are people who hope that we will take a look at it in the year coming up and see if there’s something else that can be done, and the trustees are going to take a sharp look at it,” Michalski said, “but we can’t promise that the result is going to be make everybody happy.”
The more than 100,000 employees who work for either UPMC or Highmark are excluded from going to doctors in their rival’s network.
Several employers told the Trib they are rethinking their options as their next enrollment periods approach but question whether they can afford to switch.
Shapiro, who has been meeting with various Pittsburgh-area employers, has said that he’s hopeful that more of them will decide to offer broad-based plans that include access to both UPMC and Highmark.
“It’s important to understand that an employer just can’t turn a switch off and change their strategy just because politics came into play,” said Jessica Brooks, executive director of the Pittsburgh Business Group on Health, a nonprofit coalition representing about 100 employers in Pittsburgh. “The employer has to make the best decisions for the greater good that they can. The reality is they have to do what’s affordable.”
Multiple brokers estimated that choosing a narrow-network plan could save a small company as much as 20% to 30% a year in health benefit costs on top of annual rate increases.
“No matter what business you’re in, you have a bottom line,” Blackburn said.
Managers selecting plans are tasked with evaluating not only the cost of health benefits to employers, but also the cost burden that each plan places on employees.
“If I gave you a choice and say now you can go to a broader network, maybe there’s higher deductibles, copays or employee contributions,” said Elliot Dinkin, CEO and president of Cowden Associates health insurance consulting firm. “The only way to do that (offer broad access) is to charge more or change the plan design.”
“Larger companies have three or more plans and can offer Aetna,” said Brooks, “but the smaller organizations are, the more difficult it is to have that many options.”
Nelson said he doesn’t foresee employers making a significant migration to or from Highmark or UPMC plans during upcoming enrollments.
The national insurers have “positioned themselves locally as good choices for employers with 100-plus employees and that have employees outside of Western Pennsylvania,” said Nelson — whereas UPMC and Highmark “almost equally share the Medicare, individual and small-group market for employers under 50 (employees).”
Out-of-pocket costs remain unclear
With the new contract, UPMC dropped a controversial prepay rule it planned to impose on most Highmark patients seeking nonemergency care at UPMC facilities. The contract allows all patients to get emergency room access at in-network rates and go to UPMC Children’s Hospital of Pittsburgh or Western Psychiatric Hospital.
But it’s not clear just how much more a Community Blue patient will have to pay should they choose to go to another UPMC doctor or Pittsburgh-area facility.
“A lot of onus is going to be on the individual,” Brooks said. “They’re going to have to call ahead of time, they’re going to have to ask those questions.”
Brokers and consumer advocates say that the average person likely won’t be able to afford to do so.
“We can provide an estimate and a cost, but it’s up to Highmark,” said Wood of UPMC. “All Highmark has to do to ease their patients’ mind is to agree to pay the charges and in full so we don’t have to put the patient in the middle and we don’t have to be chasing the patient for any amount that Highmark chooses not to pay.”
Highmark’s Holmberg said that out-of-network claims will be dealt with on a case-by-case basis.
“Under the agreement, they (Community Blue members) will be taken care of at any emergency room,” Holmberg said. “If they were to choose to go there on their own, we would have to understand the specifics of it.”
It’s also unclear if Highmark will choose to roll out more narrow-network offerings and just how much lower they may be priced than their broad-access options.
“We’re constantly looking at our product offerings and trying to figure out what are both the employer-based and individuals looking for, the value in the market going forward as well as on the broad network side,” said Karen Hanlon, Highmark Health’s chief operating officer. “That is an every-year process. … That will be the case as we move forward as well.”
Meanwhile, at Blackburn’s Pharmacy, some employees have said they’re still going to try to go to an out-of-network UPMC doctor to treat issues such as a rare blood disorder or cancer, Georgie Blackburn said.
“We have employees and families that rely on UPMC doctors, including many women who are not covered by their husbands or choose not to have husbands and are raising children,” she said. “The bottom line is they’re going to be paying out of pocket when they have insurance coverage.”