Exchange Plans a Bad Deal for Doctors
October 30, 2014
A number of doctors are choosing not to participate in Obamacare exchange health plans in the upcoming year. According to the medical practice trade group Medical Group Management Association, 214,524 physicians will not be participating in any Affordable Care Act Exchange.
Why are doctors unwilling to participate? According to Brittany La Couture of the American Action Forum, many doctors are worried that patients may stop paying premiums, which is problematic for providers:
- According to HHS regulations, individuals who stop paying their premiums are granted a 90-day grace period (unlike in the private insurance market, where an individual would lose his coverage altogether in the event of nonpayment).
- Insurers must continue coverage for the first 30 days of that period.
- For the next 60 days, insurers will cover any services that are provided to nonpaying patients only if the patient actually pays his overdue premium by the end of the three-month grace period.
- If he does not, the health care provider is stuck with the losses and must try to recover payment from the patient directly.
La Couture writes that this is the main reason doctors are not participating in the exchange plans. Data indicates that 1 million Americans enrolled in exchange plans but did not pay their premiums. If those individuals obtained care during the grace period, their doctors may go uncompensated.
Additionally, the exchanges have narrow networks and low reimbursement rates which are unattractive to doctors:
- To make their health plans cheap and thus attractive to potential enrollees, insurance companies created narrow networks which featured relatively few health care providers per insurance plan. Insurers offered doctors low reimbursement rates, with the idea that health care providers could make up the difference due to the high patient volume that would come from the narrow networks.
- However, the reimbursement rates are so low -- and doctors are already burdened with patients -- that the increased patient volume does nothing to make it more profitable. Insurers are offering incredibly low reimbursement rates; what the private sector would pay $1.00 for, Medicare pays $0.80 for and exchange plans pay around $0.60 for.
- Many doctors are worried that those on exchange plans are sicker than the average patient, because many on exchange plans were uninsured prior to the Affordable Care Act.
According to La Couture, 70 percent of California doctors were not participating in the state's exchange in January 2014.
Source: Brittany La Couture, "Health Care Providers are Opting-Out of Obamacare Exchange Plans," American Action Forum, October 27, 2014.
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