Consumers to face complex health market [Richmond Times-Dispatch, Va.]
(Richmond Times-Dispatch (VA) Via Acquire Media NewsEdge) Oct. 27--Access to affordable health insurance doesn't mean equal access to all hospitals, treatment centers and doctors in the Richmond region in the new federally operated marketplace.
Instead, consumers will face a choice between premium price and provider network, as insurance carriers deploy widely varying strategies to win business in what may be the most competitive health exchange market in Virginia.
The competition features a tag-team faceoff between Anthem Blue Cross and Blue Shield and HCA Virginia Health System, and Coventry Health Care and Bon Secours Richmond Health System.
Virginia Commonwealth University Health System, the state's largest safety net provider of health care to the poor, has been relegated to sec- ond-tier status and higher costs for its patients in plans offered by those insurance carriers.
While those alliances trade hospital access for price, two other insurers -- Aetna, a national insur-
ance giant that now owns Coventry, and Optima, a Hampton Roads carrier owned by Sentara Healthcare -- are betting that consumers will pay more for insurance if they have an open choice of hospitals and specialists.
"One of the objectives of the Affordable Care Act was to give choices to patients, and m this market, they've certainly succeeded in doing that," said Tony Herbert, vice president for managed care at Bon Secours.
But while consumers will have plenty of choices among health plans on the marketplace in the Richmond area, they will need guidance to understand the trade-offs between premium price and access to providers, as well as the amount they will have to pay out of pocket for care.
"It's all the more important that people take their time, do the research, and do what's best for themselves and their families," said Jill A. Hanken, senior attorney at the Virginia Poverty Law Center, which is operating a statewide network of navigators to help consumers through the new health insurance marketplace.
The battle is being waged in a marketplace, or exchange, that is intended to give people a way to buy affordable insurance, using federal tax credits and cost-sharing subsidies based on their income.
While the market has been slowed severely by breakdowns in the federal website through which people are supposed to shop and enroll for coverage, the competition among insurers for business is brisk.
"We think we have a great opportunity to reduce the number of uninsured in Virginia and grow our enrollment at the same time," said C. Burke King, president of Anthem in Virginia.
Anthem has made an aggressive play to compete for consumers who have said in surveys that price is the biggest factor in deciding on a health plan.
"The exchange is going to attract folks who have told us price matters more to them than the breadth of their (provider) network," King said.
With that in mind, the company allied with HCA as the "preferred provider" in a network that entirely excludes Bon Secours as a hospital option for people in the Richmond region who buy Anthem's HealthKeepers plans on the exchange.
The out-of-network exclusion covers hospitals, affiliated treatment centers and hospital-based physicians at Bon Secours, but it may not cover Bon Secours physician groups, depending on the services they provide, said Anthem spokesman Scott Golden.
"People will pay less out of pocket using HCA facilities in the Richmond area," he said.
People who buy Anthem plans outside of the new marketplace still will have the option of using Bon Secours' four hospitals in the Richmond area.
The agreement with HCA also covers other parts of the state, such as Northern Virginia and Southwest Virginia, but doesn't treat rival hospital systems in those regions as "out of network" providers for Anthem plans on the exchange.
"Richmond is really the only market where there is a tier of out-of-network hospitals," King said. "The marketplace has robust competition between the hospital facilities."
Anthem's health planson the exchange put other hospitals in a second tier of providers. Those hospitals would have to charge larger co-payments or co-insurance to patients who use them instead of HCA, which owns 13 hospitals in Virginia, including five in the Richmond area and one in Hopewell.
The idea behind such "high performance networks" is to reduce consumers' cost while improving the quality of their care through coordinated health systems.
King estimates the cost of care would be 10 to 20 percent higher at Tier 2 hospitals, including Virginia Commonwealth University Health System.
"We want to be a health care option for everybody," said Penny Trentholm, vice president of managed care and payer relations at VCU. "We're not pleased at being tiered at a higher number."
VCU also would be on the second tier of providers for exchange customers of Coventry CareLink, a series of health plans offered in the new marketplace under an alliance between Coventry Health Care and Bon Secours.
Trentholm said Friday that Anthem and Coventry have not communicated to VCU the details of how their health plans would affect the cost to patients of using the academic medical center.
Coventry is offering five health plans in the marketplace, including two low-pre- mium HMO plans that apply only to care at Bon Secours facilities. Three other plans are considered "point of service," in which the cost of care varies among three tiers -- the lowest at Bon Secours facilities, followed by hospitals, including VCU, that contract with Coventry, and then out-of-network facilities.
Those varying costs include annual deductibles that consumers must pay before insurance covers their care; coinsurance payments that range from 20 to 50 percent of cost, depending on the tier; and co-payments for office visits to doctors, specialists and other services.
These network arrangements make the monthly premiums only one of the financial factors that people should consider in choosing a plan.
"What you pay after that premium takes some thinking on your part, where you get your care," said Aetna spokesman Walter Cherniak Jr.
Aetna has a different strategyin the Richmond market than Coventry, which it acquired in May. Aetna offers seven plans for the Richmond market on the exchange, but all provide open access to provider networks.
Optima has the same approach, based on the assumption that many consumers place a higher value on their choice of hospital and specialist than on monthly premiums.
"Optima Health always has tried very hard to simplify things and do things that are convenient to the consumer," said Steve Cindrich, director of strategic business development and products.
Optima has a harder time competing on price in the Richmond area than its home base of Hampton Roads, where it is part of the Sentara health system.
The company estimated a 28 percent higher premium in Richmond than Hampton Roads in a presentation to the State Corporation Commission in July.
"It all depends on where you're starting from," said John DeGruttola, senior vice president of marketing and sales at Optima.
Insurers and advocates alike are concerned that consumers need to consider costs other than monthly premiums, especially annual deductibles and the annual maximum expenses that customers pay out of pocket.
"Providing access to a product that's not affordable isn't providing access at all," said Herbert at Bon Secours, a nonprofit hospital system that prides itself on a mission of charity care.
Plans are sold in the marketplace in a series of metal tiers -- bronze, silver, gold and platinum -- that represent the actuarial value of insurance as a percentage of the total cost of care. The lowest, bronze tier, for example, represents a value of 60 percent, meaning the consumer would pay 40 percent of the costs.
So plans with low-premiums, such as bronze or catastrophic coverage that is sold primarily to young people who don't routinely use their insurance, also carry higher deductibles and out-of-pocket expenses.
"I think people will be enticed by the low premiums of the bronze plans, but in the end of the day those are the ones who are going to have higher out-of-pocket expenses," Trentholm said at VCU.
For example, an Anthem bronze plan could carry an annual deductible as high as $6,000 for a person and $12,000 for a family and annual out-of-pocket maximums of $6,350 for an individual and $12,700 for a family.
In contrast, an Anthem gold plan could have an annual deductible as low as $750 for an individual and $1,500 for a family, with annual limits on out-of-pocket expenses of $3,500 for an individual and $7,000 for a family.
The lowest premium Coventry plans -- HMOs with an exclusive Bon Secours network -- carry annual deductibles of $6,350 for an individual and $12,600 for a family, with roughly the same limits for annual out-of- pocket expenses.
Insurers say theyare committed to educating consumers, who may know nothing about insurance, on how to shop for a plan they can afford.
"We know there's a lot of confusion and anxiety in the marketplace," said King at Anthem, which has hired "several hundred" employees in the Richmond and Roanoke areas to answer telephone inquiries, help and enroll customers, and process claims.
"What I've told our associates is: it is our job to hold their hands and make sure the customers get access to the health care they need," King said.
"It's all the more important that people take their time, do the research, and do what's best for themselves and their families."
Jill A. Hanken
Senior attorney at the Virginia Poverty Law Center
"Richmond is really the only market where there is a tier of out-of-network hospitals. The marketplace has robust competition between the hospital facilities."
C. Burke King
President of Anthem in Virginia
(c)2013 the Richmond Times-Dispatch (Richmond, Va.)
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