• What will insurance in the exchanges look like?

    I was talking with some very nice insurance company executives and managers yesterday, and asked them about what they might offer in the exchanges.  It’s worth sharing some thoughts.

    The media, and thus the country, are fixated on the politics at a national level.  I’ve argued before that’s missing the point, as much of this will happen at a state level.  But I think we have spent far too much time discussing repealing or defunding the bill, and not nearly enough on what still needs to be done.

    For instance, we just told millions of people that they can go to the exchanges in 2014 and buy insurance.  There won’t be any lifetime or annual limits.  There won’t be denials for pre-existing conditions.  There won’t be any surcharges for having such conditions.  And it’s going to be “reasonably” priced.

    I asked what insurance companies might offer under those conditions.  After all, if it were really that easy to offer comprehensive insurance at a real discount, someone would already do it.

    Such insurance is going to have to come with restrictions.  There might be network restrictions (such as seeing only certain providers).  There might be gateways people don’t like.  And there might be other rules in place that people don’t anticipate.

    My conversations lead me to believe that many people are expecting that the plans offered in the exchanges will be Medicare-like in many ways.  I feel like many people think they will have choice of doctor, choice of hospital, and the ability to dictate care.  I’m not seeing how insurance companies will be able to offer such products at prices people can afford.  As I talk to more and more people in the insurance industry, my thoughts seem confirmed.

    I may be wrong, but I think it’s worth addressing.  Mistaken expectations have been, and continue to be, a real problem in health care reform.

    • “I feel like many people think they will have choice of doctor, choice of hospital, and the ability to dictate care. ”

      Is it just me, or aren’t the above features common to most “socialized” health care systems, and conversely, lacking from most US for-profit, private sector health care insurance plans?

    • @Ken – What do you mean by “socialized”? Are plans offered by private firms competing in an exchange socialized? And what of traditional Medicare, which has an open network?

      It seems you`re implying something. Come clean. What is it?

    • Hmm, I don’t get the feeling that people have an expectation that products in the exchange will be significantly different than products outside. Do most people have any firm ideas at all at this point?

      There will be tons of explicit talk of the bronze to platinum benefit levels, so I don’t see how expectations will be out of line there. People are used to dealing with insurer networks. Where would this Medicare idea come from?

      But I agree that there may be unpleasant surprises in the trade off. The most affordable plans will either have a small network or high cost sharing, or both. People may buy into small network plans because the benefits are a good value for the price and then get upset because a doc or hospital isn’t in the network. Health plans are going to be tempted to de-emphasize a small network to compete for business, leading to consumer dissatisfaction once they see first hand the limitations. I think this is exactly what happened in MA, by the way.

    • I’m reminded of the engineering cliche

      fast, cheap, good; pick two.

    • At the very least, I would expect individuals to be able to get group rates in the exchanges, and for small businesses to get large-group rates. These are not insignificant savings.

    • The biggest issue will be breaking up the anti-competitive pricing power of providers like Partners. Teaching hospitals are also part of the problem: we need to find other ways to underwrite certain costs there.

    • Too bad the Obama administration and career “progressives” silenced and censored single payer advocates, when single payer was the only policy option on offer (HR 676; S703) that can be demonstrated to save both lives and money. (And, ironically enough, is the “centrist” solution — the UK’s NHS being the “left” solution). People envision “Medicare for All” as the desired policy outcome from elites who have some notion of public purpose, because they know it works; what they’ve gotten from Obama, and the career “progressives” who ran interference for him, is a bailout of the for-profit insurance companies, and the can kicked down the road ’til 2014, at a cost of a mere 45,000 lives a year from people who can’t get care. The Rs, of course, call that “Socialism ZOMG!!!!” but all that means is that one side is lying, and the other is not telling the truth.

    • I think the term “socialized medicine” is often used imprecisely, or misleadingly.

      As far as I am aware, we have just a single socialized medicine system in this country: the VA system. The doctors ,nurses, physicians’ assistants, lab technicians, data processing specialists, etc, etc,, are all employees of the public, that is, the government. A few functions are probably contracted to private vendors, for example, food services, cleaning, and grounds maintenance.

      Similarly, the hospitals, all equipment, probably ambulances, are all owned by the government.. That’s socialized medicine.

      The Canadian, South Korean and Taiwanese systems, all very similar, are single payer systems. All the staff I listed are private workers who can arrange themselves in group pracices, single MD offices, or how they wish. Hospitals are usually private (by no means always) but non-profit. Doctors and hospitals submit bills for a large set of standardized activities to a central payer (in Canada it goes province by province, not to the central government). The system is somewhat like US Medicare, but not completely.

      In Great Britain, the system is much like the VA, doctors, nurses, etc. are essentially civil servants, and the system is like the VA. Socialized medicine, no question.

      I’m making no judgements about the merits of different systems, just trying to make clear that US Medicare, or the Canadian single payer system (also confusingly called Medicare), are not socialist schemes.

    • All they have to do is offer the SAME plans as they offer corporate America or Congress at the same price and it already is 10X better than what we have today. [You know REAL coverage at $4-6K per person rather than the “partial” coverage with loopholes at $19K+ per person. That’s all we ask.

    • Well as a physician I see that most of these plans will have to be HMO. If they allow – normal pricing of lab and xray studies – they would be prohibitively expensive. So HMO is all they could offer.

      I suppose they could try to form a PPO as well. But in these cases you have only limited doctor choice. Medicare at least has a larger doctor choice at the moment until they cut rates by 30 percent as they keep suggesting. If they do this – this would sink my fledgling business.

      I just want to provide the highest quality MRI for the least amount of money. This is a unique business model since most providers are NOT interested in highest quality. It is a sad statement but after three years of providing 3T MRI to the state of Delaware most providers still do not know the distinct and great advantages of a 3T MRI scanner.

      They are faster and more detailed and can show more disease than a lower powered scanner and cost the same price. Also due to the field strength difference we can use MR contrast at 1/2 dose which is distinctly safer for the patients. However I do believe that over time doctors will eventually realize the benefits. Currently we market to patients rather than doctors because they actually read and will listen. Most older doctors will not.

    • Folks seem to be missing the point that the insurance exchanges will offer products for the uninsured. Those of us who have insurance through our employers will not be required to purchase through these exchanges, I don’t care what panicmongers at Fox say. While some small businesses might decide to stop offering employees insurance., my personal experience with these plans are that they are expensive and don’t cover routine wellness care. If I’m in the same situation in 2014 I would be glad to see what the exhanges can offer me until I qualify for Medicare the following year.

    • Excuse me Dr. Chao, but 3T is NOT cheaper. They are certainly wonderful for advanced neuro applications as well as small parts imaging but please don’t be claiming that they’re “cheaper”. They’re not.

    • Folks seem to be missing the point that the insurance exchanges will offer products for the uninsured.