Two San Francisco residents sued Blue Shield of California last week, claiming the insurance company misled them into purchasing their policies through Covered California by not informing them the networks of doctors and hospitals would be much smaller, which they are.
Terry Baynes at Reuters said the lawsuit, filed in San Francisco County Superior Court on behalf of John Harrington and Alex Talon, is seeking class-action status on behalf of all those who came away from the Obamacare website thinking it assured enrollees access to the entire network. Covered California has never provided the list it promised of participating doctors and hospitals, for various reasons, and doesn't seem likely to in the near future.
"We take these charges seriously, and believe enrollees should be as informed as possible about the products they select," Blue Shield of California spokesman Sean Barry told Reuters.
Yes they should.
The state did put up a list months after the website debuted, but quickly 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. Blue Shield would tell consumers their doctors were in the network and the doctors would tell them no.
The state now says it might not have a functioning directory of providers until 2015.
Legitimate publications were noting the deficiency as far back as June 2013, but no one had definitive numbers on network sizes. Chris Lewis wrote at HealthLeaders InterStudy that the newly unveiled Covered California premiums were lower than expected because of narrow networks “to make the financials work in a heavily-regulated environment.”
She knew even then that “and in most cases, members won’t have access to marquee systems such as UCLA Health System or Cedars-Sinai Medical Center.”
Wonkish Mother Jones blogger Kevin Drum noted on November 18 that there was legitimate buzz about “network shock which had potential to be serious, although he was “a little surprised at how little concrete data we have on a lot of this stuff.” It had already been a Fox hobbyhorse for awhile.
A week later Drum acknowledged network shock was significant for some consumers, but said that website problems were the big issue. Within a couple weeks he had upped the ante and wrote there could be “substantial dissatisfaction from consumers,” depending on how narrow the networks were.
He noted that Megan McArdle at Bloomberg was probably right that “average folks don't think like healthcare wonks” and didn't know the smaller networks were coming, but they should have. America's healthcare industry has been doing that since at least 1998 and the rise of PPOs, HMOs and POSs was based on restricted networks. Somebody wasn't paying attention.
Even if they had been, getting a handle on the numbers is difficult. Lewis last June referenced a Los Angeles Times number that only 36% of Blue Shield doctors would be in the Covered California network. The San Francisco Chronicle wrote in January that Blue Shield's Covered California network included just 60% of its doctors and 70% of its hospitals.
“In this new reform era, narrow networks are a fact of life that ironically harkens to the HMO foundation of the state,” Lewis wrote. “The restriction of choice could be considered a small price to pay for those who are now priced out or otherwise excluded from coverage.”
Could be. But Harrington and Talon don't think so.
–Ken Broder
To Learn More:
California Consumers Say Duped by Blue Shield's Limited Obamacare Plans (by Terry Baynes, Reuters)
Covered California Clients Have Trouble Finding Doctors (by Victoria Colliver, San Francisco Chronicle)
Covered California Rates Hinge on Smaller Networks (by Chris Lewis, HealthLeaders InterStudy)
Covered California: Cheaper, Better Insurance, but Good Luck Finding a Doctor or Hospital (by Ken Broder, AllGov California)