Covered California: Cheaper, Better Insurance, but Good Luck Finding a Doctor or Hospital

Friday, April 11, 2014

The Obama administration celebrated the end of open enrollment this week by proclaiming the victorious signup of 7.5 million Americans under the Affordable Care Act and accepting the resignation of the woman responsible for overseeing its uneven rollout, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius

But after the backslapping and high-fives are over, more than 1.2 million enrollees in California will be faced with a harsh reality.

The dirty little secret of Covered California (CC) is that those using the state's version of Obamacare, presumably to receive a premium subsidy, have far fewer physician and hospital choices than those who deal directly with an insurance provider.

In other words, someone whose doctors or hospital are in the regular Blue Shield of California network may very well not be able to find them in the Blue Shield CC exchange network. Sometimes they might find just one. That was the story Los Angeles resident Noam Friedlander told Kathleen Miles at Huffington Post.

Friedlander needed an operation for a herniated disk, but she quickly found out that very few of the very few specialists available to her under Covered California's roster of Blue Shield doctors were affiliated with the very few hospitals available to her. She called dozens of doctors and multiple hospitals.

“They told me, 'I'm so sorry—it's all just so new. You're a victim of the changes. No one knows what they're doing,' ” Friedlander said.

She was left with a choice: Pick a surgeon or a hospital that is on the list. Friedlander couldn't have both. She opted for the hospital. Friedlander hopes the medical facility will truly be covered by insurance because she's paying $16,000 out of pocket for the doctor.

Much of this was unknown when the state rolled out Covered California last year. It had promised to have listings of available doctors and hospitals but delayed their inclusion for months. Shortly after officials finally provided the information on the website, they took it down because it was inaccurate. Turns out, one of the complicating factors was a lot of doctors had no idea they were obligated under previous contracts with insurers to join the network and they were now resistant.

The state now says it might not have a functioning directory of providers until 2015.   

The Covered California networks of Blue Shield and Blue Cross together cover about 60% of exchange enrollees and both are much smaller than their unsubsidized brethren. The Blue Shield network includes just 60% of the doctors and 75% of the hospitals in the full network, according to the San Francisco Chronicle. That number might be higher if Blue Shield wasn’t reimbursing the exchange participants 30% less than those billing outside of it.

Having a smaller pool of doctors and hospitals is the key to keeping costs down for insurance companies. It’s called “doc shock” by some, “network shock” by others and it’s nothing new. Fifteen years ago, most everyone with insurance had the freedom to choose their doctor. But the introduction of PPOs, HMOs, EPOs and others ended up putting 99% of people under some sort of restriction.  

So while a lot of people who didn't have insurance have it now, and a lot of people are paying less money for better coverage, finding a doctor or a hospital to care for them has become a lot tougher.

–Ken Broder


To Learn More:

How Obamacare Leaves Some People Without Doctors (by Kathleen Miles, Huffington Post)

Obamacare Enrollees Hit Snags at Doctors' Offices (by Chad Terhune, Los Angeles Times)

“Doc Shock”: Why Can’t Covered California Provide Accurate Physician and Hospital Lists? (by Ken Broder, AllGov California)

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