Patients on ACA plans at higher risk for surprise bills, physician coalition says

Patients are at a higher risk of receiving surprise medical bills on Affordable Care Act exchanges, according to a new report.

The reason: More restrictive networks.

In 2018, more than 73% of plans available in the exchange marketplace offered restrictive networks, compared with 48% in 2014, according to the report (PDF) commissioned by Physicians for Fair Coverage. PFC is a nonprofit alliance of physician groups which advocates for ending surprise insurance gaps and improving patient protections. 

The research, performed by the healthcare research firm Avalere, showed that patients are paying more for insurance through higher premiums, deductibles and cost-sharing while their insurance networks have become more narrow and restrictive.

That can increase the risk of patients receiving surprise bills, especially when they seek emergency room care.

“This research confirms what patients and physicians across the country have known for some time,” said PFC President and CEO Michele Kimball in a statement. “Insurers have been systematically narrowing their networks and increasing premiums, creating surprise insurance gaps that patients don’t realize exist until it’s too late. While insurers are making record profits, patients are paying more for less.”

Michele H. Kimball
Michele Kimball  (PFC)

The coalition, which includes tens of thousands of emergency physicians, anesthesiologists and radiologists from across the country, is pressing for more states to adopt legislation to solve the problem of surprise medical bills. The problem often occurs when a patient seeks care at an in-network hospital but is then surprised the doctor treating them is out of their insurance company’s network—a fact they usually find out when they get the doctor’s bill.

“When it comes to health care, nobody likes a surprise. This study confirms what we've been hearing from patients for years: there is no real way for patients to avoid a ‘surprise’ medical bill, even when they're insured and try to stay in-network. We need a transparent healthcare system designed for patients, not profits,” Rebecca Kirch, executive vice president of healthcare quality and value at the National Patient Advocate Foundation, said in a statement.

To conduct its research, Avalere analyzed the Department of Health and Human Services’ Individual Market Landscape Files from 2014 to 2017, as well as data from the state-exchange websites. Additionally, Avalere used Strenuus network data for the 2017 plan year to determine the inclusion of specific providers in networks by market.

As the number of health plans on the exchanges offering restrictive networks increased in the last four years, the study found that the overall costs for care are increasing faster in exchange markets. The average ACA exchange market premiums increased 28% from 2014 to 2017, according to the report. Almost 90% of enrollees in ACA exchange plans had deductibles above $1,300 and the average maximum out-of-pocket limit increased by 12%.

In 2017, exchange plans had the lowest inclusion of providers compared to employer-sponsored insurance and Medicare Advantage networks. The study also found gaps in specialty coverage, with exchange network plans in 2017 covering between 34% and 66% fewer providers than those in other markets, with specialties such as anesthesiologists, radiologists and emergency physicians more often out-of-network in exchange plans.

At the same time, insurers are increasing their profit margins, the report said, with several top insurance companies posting profit margins in the first quarter of 2018 that were the highest in a decade.

Late last month, one health policy expert urged Congress to halt the practice that allows patients to be stuck with surprise medical bills for out-of-network providers. Ashish Jha, M.D., director of the Harvard Global Health Institute, told lawmakers during a Senate Health Education Labor & Pensions (HELP) Committee hearing the practice is an “outrage” and ought to be illegal.

The best estimates indicate that 1 out of 7 times someone goes to the emergency department, they are going to be stuck with a surprise bill.