In the news: tighter networks, less employer coverage

Two articles of interest in yesterday’s Boston Globe. I don’t have time to comment much.

Insurers hawk plans with less choice, by Reed Abelson

As the Obama administration begins to enact the new national health care law, the country’s biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals. …

The size of these networks is typically much smaller than traditional plans. In New York, for example, Aetna offers a narrow-network plan that has about half the doctors and two-thirds of the hospitals the insurer typically offers. People enrolled in this plan are covered only if they go to a doctor or hospital within the network, but insurers are also experimenting with plans where it simply costs more to go outside the network. The new health care law offers some protection against plans offering overly restrictive networks, said Nancy-Ann DeParle, head of the office of health reform for the White House. Any plan sold in the exchanges will have to meet standards to make sure patients have enough choice, she said.

This will increase price competition. But consumers will not like it, in general. In exchange for significantly lower premiums, maybe enough will.

Firms cancel health coverage, by Kay Lazar

The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget. …

State officials said they have not seen convincing evidence that there is a trend. There has not been an unusually large spike in enrollment in Commonwealth Care, the subsidized insurance program, according to spokesman Richard Powers. And in any case, Dr. JudyAnn Bigby, secretary of health and human services, said the administration budgeted for higher health care spending because it anticipated that there would be growing numbers of long-term unemployed residents who would be signing up for coverage.

If this is a real trend, it could have far more to do with the economic downturn than the nature of the Massachusetts health care market. What do you expect when health care costs go up and business revenue goes down? At least there is a sensible individual market for folks to fall back on.

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