August 5, 2014:
Rates are one big issue for consumers who shop through Covered California. The other is whether there are enough doctors to treat everybody who signed up.
Last week, Covered California announced a lower-than-expected proposed average rate increases of 4.2 percent for 2015 — a move heralded by insurance brokers, consumer advocates and others. Now pressure is mounting to push insurers to increase the size of provider networks.
Lots of consumers who signed up for health plans in the first open enrollment struggled to find doctors in so-called “narrow networks” offered by Anthem Blue Cross and Blue Shield of California. “It’s good to see these rates are lower than we thought,” said Joe Hart, a Sacramento insurance broker. But “It would be nice to see expansion of the networks.”
Peter Lee, executive director at Covered California, linked networks to value when he released the proposed new rates last week.
“Covered California is committed to ensure access to care, and we are working with the Department of Managed Health Care to make sure provider directories are spot on,” he said.
Kaiser Permanente has its own built-in network. The other plan that competes for business through Covered California in the Sacramento region is Western Health Advantage, which is owned by Dignity Health, the UC Davis Health System and NorthBay Healthcare in Fairfield — and allows members to use any of these providers.
Therefore, the local focus is on Anthem and Blue Shield, both of which created narrow networks for their exchange business. The idea was to channel business to a smaller group of doctors willing to take less money in exchange for the promise of more patients. In varying degrees, these networks were overwhelmed by the deluge of new business.
Pundits predicted a total of just over 28,700 people in the Sacramento region would sign up for benefits through Covered California the first year. More than 69,500 flocked to the program for coverage, 242 percent above projections.
Anthem has added 6,300 doctors to its narrow network since January and now has a total of 38,0000 statewide. In Sacramento, Anthem added UC Davis Medical Center and its doctors to its “Pathways” network. Blue Shield has added 40 more hospitals, and 15,000 doctors to its statewide network in the last year.
Some of this was done in response to complaints by patients unable to find a doctor in their area, but legislators have weighed in with several bills. Some legislation died. Two bills are left as lawmakers blitz to the finish line at the end of the month.
Senate Bill 964 by state Sen. Ed Hernandez would require the Department of Managed Health Care to review Medi-Cal managed care plans and plans sold through Covered California annually for compliance with state standards for timely access, network adequacy and other measures. Consumer groups support the measure; health plans say it’s unnecessary.
“SB 964 will increase oversight and enforcement of insurers so people can get the care they need where and when they need it,” Anthony Wright, executive director of bill sponsor Health Access, said in a statement.
State regulators already review plans for timely access and network adequacy; the bill will impose new reporting requirements that are expensive and unnecessary, countered Charles Bacchi, executive vice president of the California Association of Health Plans.
“It’s a complicated and expensive bill, but we are in discussions to find the middle road,” Bacchi said.
The trade group is adamantly opposed to Assembly Bill 2533 by Assemblyman Tom Ammiano, which would allow consumers to go out of network if they have to — and pay as if the provider is in network.
“This bill provides a real-world remedy for people who can’t get timely access,” Wright said in a news release. “Insurers promise the networks are big enough to provide access to care in a timely fashion; otherwise, the insurers are making a false claim.”
Plans understand how important it is for consumers to have timely access to care and are working with Covered California to meet standards already in law, Bacchi said. Assembly Bill 2533 “goes in the wrong direction” and would destroy years of managed-care policy that attempts to channel patients into cost-effective care, he added,
The California Department of Finance opposes the bill because it would crank up state costs.