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Isn't It Impossible to Really Shop ACA Plans?
Old 10-21-2013, 05:00 PM   #1
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Isn't It Impossible to Really Shop ACA Plans?

We all know that those of us with health insurance never pay the 'rack rate', which is typically 4 times the price that the insurance company has negotiated.

So when deciding on a health insurance carrier, you want one that did a good job of negotiating, right? How are you supposed to figure that out?

My current provider "A" has an estimator, so I can pick something meaningful to me: the colonoscopy procedure. If it's not done in the hospital, the going rack rate is around 5,500. Let's say insurance company "A" has negotiated a rate of $1,244. Unfortunately, "A" is not playing ball with the AHA.

So I call "B" and ask them how much they estimate the same procedure would cost. They say that they "don't disclose that information". It's in a contract between them and the provider. I call "C", same story. There are only two companies on the exchange.

So let's say I save a few bucks choosing "C" in the much heralded "marketplace" (where I'm supposed to have all the information I need to compare one plan with the other). Then when the time comes, I submit the claim with "C" and only then discover that their negotiated a rate for the procedure is $2,000! And my neighbor then tells me that "B" did a good job negotiating and so he only got reamed for only $1,000.

If their ain't a place where plain folks can post actual procedure code charges by doctor or facility, there should be. That's the only way we can get any cost pressure. Right now we're completely in the dark.
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Old 10-21-2013, 05:18 PM   #2
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Failing finding any actual cost data, if you have a large incumbent insurer in your area, they might have the most negotiating power with the providers.

Have you been to healthcarebluebook.com yet? They provide average insurance costs for procedures. I have heard that some insurance companies have contracted with them to provide the actual cost data for their insured. My insurance company did not appear to have a relationship with them when I had my kidney stone work done earlier this year.

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Old 10-21-2013, 06:10 PM   #3
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People keep talking about how expensive healthcare is in the US. And we have beaten up insurance companies, but transparent charges from providers have not been discussed.

For years, as relatively healthy individuals, we used very little healthcare. However, due to our high-deductible policy, we had to pay out-of-pocket for all annual exams, visits to our GP, blood tests, etc... and found them all to be quite reasonable. By reasonable, I mean compared to what you would pay your auto mechanic, A/C repairman, plumber, etc... I remember paying less than $1K for a colonoscopy about 4 years ago.

But recently, as I have used quite a bit of expensive healthcare, I have found that some hospital charges can be quite high, and may differ significantly from one place to another. There is no transparency there either. I already exceeded my deductible, hence my insurer picked up the entire bills, but I am still interested in the charges.

About 30 years ago, the megacorp I worked for spearheaded a healthcare reform at the state level. Faced with high medical insurance costs, they tried to push for laws that demanded more open pricing structures. The measure failed miserably. People back then did not care.

The above was back when companies typically provided health insurance at zero premium to its employees, and for families at very low cost. There was no deductible, no copay either. It all was so good, hence nobody cared about what it cost. My megacorp was way ahead of its time, when it saw what was coming, and tried to do something about it.
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Old 10-21-2013, 07:33 PM   #4
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I had this same question about our choices with ACA plans. I called our current insurer, who has very reasonable negotiated rate amounts, and asked about if claims on the ACA plans would have similar negotiated rates. They told me that if it's the same network name, then yes, the negotiated rates would be the same as we've seen.

They verified for me that the ACA plan choices I was considering on healthcare.gov used the same network.

We had choices of 60 plans though 6 insurers. One was Kaiser HMO, then another HMO that I had never heard of and the link to providers didn't work. Then an unfamiliar insurer with very few providers nearby, then Anthem BCBS with enough providers, an insurer with a large local hospital system and physicians, and then our current insurer. Every provider In our local area is in our current provider network and most are in the other local one, so we decided to consider just those two insurers.

We decided on a HDHP with an HSA with our current insurer, mainly because IF what they told me pans out to be true, then at least we know a little bit about how this should all turn out.

In the past our current insurer will tell me the negotiated rate for a service if I have the provider's tax ID number and the code for the procedure.
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Old 10-21-2013, 09:31 PM   #5
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I had this same question about our choices with ACA plans. I called our current insurer, who has very reasonable negotiated rate amounts, and asked about if claims on the ACA plans would have similar negotiated rates. They told me that if it's the same network name, then yes, the negotiated rates would be the same as we've seen.
This is apparently NOT the case for most of the US. According to recent independent survey of 1000 physician groups (inc 47k docs), 2/3rds said Exchange plan payments rates were lower than for other HI products from the same carrier.

Medical group practices approaching ACA exchange participation with caution - MGMA

ACA Exchange Implementation LEARN

Only time will tell, but if the overall negotiated procedure rate remains the same this survey suggests patients on Exchange Plans may be subject to higher co-pays (up to Plan deductibles & OOP max).
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Old 10-21-2013, 09:47 PM   #6
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This is apparently NOT the case for most of the US. According to recent independent survey of 1000 physician groups (inc 47k docs), 2/3rds said Exchange plan payments rates were lower than for other HI products from the same carrier.

Medical group practices approaching ACA exchange participation with caution - MGMA

ACA Exchange Implementation LEARN

Only time will tell, but if the overall negotiated procedure rate remains the same this survey suggests patients on Exchange Plans may be subject to higher co-pays (up to Plan deductibles & OOP max).
If the exchange plan has negotiated a lower rate, they pay less and you pay less, right? Unless you go out of network, in which case they might have a smaller "reasonable and customary" payment and you could be on the hook for the non-negotiated balance.

Given that the insurer is paying 60% to 90% in network, it seems like it would be safe to assume that the cheaper insurance will have the cheaper negotiated rates. Certainly there won't be a giant disconnect.
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Old 10-21-2013, 10:51 PM   #7
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Yes, since we have no way to know the negotiated rates, choosing among plans is akin to buying a pig in a poke. Only those who know they will max the OOP don't have to consider this issue.
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Old 10-22-2013, 08:00 AM   #8
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Originally Posted by ERhoosier View Post
This is apparently NOT the case for most of the US. According to recent independent survey of 1000 physician groups (inc 47k docs), 2/3rds said Exchange plan payments rates were lower than for other HI products from the same carrier.
It's probably a bit early to draw conclusions about reimbursement rates, given they haven't yet started. The large national insurers don't seem to be following this practice, and are instead restricting their networks to contain costs.

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Only time will tell, but if the overall negotiated procedure rate remains the same this survey suggests patients on Exchange Plans may be subject to higher co-pays (up to Plan deductibles & OOP max).
Accepting a larger cost share in exchange for a slower increase in premiums has been happening for a decade and is one way large group policies have been indirectly transferring the cost of insurance to the user. It is a bit scary, because now total OOP numbers are in the same range as the average savings amount reported by some financial studies and frequently discussed here.
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Old 10-22-2013, 09:48 AM   #9
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Yes, since we have no way to know the negotiated rates, choosing among plans is akin to buying a pig in a poke. Only those who know they will max the OOP don't have to consider this issue.
I love that expression..."pig in a poke". That exactly what it seems to be to me.

Meanwhile, on another call to an insurance company:

ME: How much is your negotiated rate for procedure X for facility Y?
THEM: We don't disclose that
ME: How can I compare your plan with the competition if I don't know that?
THEM: Call your doctor's billing office.
ME: So they are going to help me find the insurer that pays them the least?
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Old 10-22-2013, 09:53 AM   #10
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Your provider knows how much they get from each insurer for a procedure. Your provider is the best one to answer this question. Insurers don't disclose how much they pay a provider because it is considered proprietary info. They certainly don't want Insurer B to know that they are paying the provider 2% more for the same procedure.

At the same time, it is important to understand that while your provider might be getting 2% more for the colonoscopy, they are getting 10% less for an appendectomy.

The best you can do is to use an independent site that give you rates for standard procedures to estimate your costs, then compare the premiums among carriers for similar costs.

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Old 10-22-2013, 10:55 AM   #11
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If the exchange plan has negotiated a lower rate, they pay less and you pay less, right? Unless you go out of network, in which case they might have a smaller "reasonable and customary" payment and you could be on the hook for the non-negotiated balance.....
Not necessarily. If the total negotiated procedure fee is the same but the insurance payment rate is lower, the patient co-pay will be larger to make up the difference (subject to deductible/OOP max). As MichaelB said, this form of "cost-sharing" has been going on for years with patients being responsible for increasing cost share.

And many (most?) Exchange Plans will have NO out-of-network coverage (except emergencies) so the patient would be responsible for the entire bill. If you travel a lot within the US, it is important to shop for multi-state network coverage.
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Old 10-22-2013, 11:29 AM   #12
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Not necessarily. If the total negotiated procedure fee is the same but the insurance payment rate is lower, the patient co-pay will be larger to make up the difference (subject to deductible/OOP max). As MichaelB said, this form of "cost-sharing" has been going on for years with patients being responsible for increasing cost share.

And many (most?) Exchange Plans will have NO out-of-network coverage (except emergencies) so the patient would be responsible for the entire bill. If you travel a lot within the US, it is important to shop for multi-state network coverage.
You mean a negotiated rate that is higher than the "reasonable and customary" rate that the insurer will pay? I've never seen that inside a network.
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Old 10-22-2013, 11:36 AM   #13
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It's probably a bit early to draw conclusions about reimbursement rates, given they haven't yet started. The large national insurers don't seem to be following this practice, and are instead restricting their networks to contain costs. ....
Indeed it is early. Historically, providers/facilities join a carrier network based on how much fee reduction they will accept in exchange for access to that carrier's plan-insured population (potential for more business). It's main reason big carriers in a specific region can generally negotiate lower rates. It's also possible that carriers are expecting to control costs by restricting network access to only those providers who will agree to restrict access to expensive care, (a whole 'nother issue).
That said, everything I've seen published & literally every HC provider/admin type I know supports the findings of the MGMA survey. While they cannot discuss actual $$$, every one has said that Exchange Plan payment rates will mostly be lower than comparable commercial products from same carrier.
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Old 10-22-2013, 11:55 AM   #14
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You mean a negotiated rate that is higher than the "reasonable and customary" rate that the insurer will pay? I've never seen that inside a network.
That's not quite what I was trying to say. For a specific procedure a carrier may negotiate a total allowable fee (facility + provider + patient co-pay) and provider payment independently. Decreasing the provider &/or facility fee may leave the patient paying more (again subject to deductibles/OOP max). That's happened to me before.
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Old 10-22-2013, 03:45 PM   #15
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And many (most?) Exchange Plans will have NO out-of-network coverage (except emergencies) so the patient would be responsible for the entire bill. If you travel a lot within the US, it is important to shop for multi-state network coverage.
It looks to me like most states have options that include large nation-wide networks along with small, regional and somewhat restricted provider networks, and policyholders can choose.

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That said, everything I've seen published & literally every HC provider/admin type I know supports the findings of the MGMA survey. While they cannot discuss actual $$$, every one has said that Exchange Plan payment rates will mostly be lower than comparable commercial products from same carrier.
My sense is this is something that is being talked about but there is no data to back it up. In other words, more of a lobby talking point, not too different from what we hear about Medicare rates.
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Old 10-22-2013, 03:56 PM   #16
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We all know that those of us with health insurance never pay the 'rack rate', which is typically 4 times the price that the insurance company has negotiated.

So when deciding on a health insurance carrier, you want one that did a good job of negotiating, right? How are you supposed to figure that out?

My current provider "A" has an estimator, so I can pick something meaningful to me: the colonoscopy procedure. If it's not done in the hospital, the going rack rate is around 5,500. Let's say insurance company "A" has negotiated a rate of $1,244. Unfortunately, "A" is not playing ball with the AHA.

So I call "B" and ask them how much they estimate the same procedure would cost. They say that they "don't disclose that information". It's in a contract between them and the provider. I call "C", same story. There are only two companies on the exchange.

So let's say I save a few bucks choosing "C" in the much heralded "marketplace" (where I'm supposed to have all the information I need to compare one plan with the other). Then when the time comes, I submit the claim with "C" and only then discover that their negotiated a rate for the procedure is $2,000! And my neighbor then tells me that "B" did a good job negotiating and so he only got reamed for only $1,000.

If their ain't a place where plain folks can post actual procedure code charges by doctor or facility, there should be. That's the only way we can get any cost pressure. Right now we're completely in the dark.
I thought long and hard about this same issue before choosing a plan in the exchange (and, yes, believe it or not, I'm one of the few out there who has already successfully navigated thru it all to actually confirm enrollment).

In my state, Florida, Blue Cross is by far the most widespread insurer. I had originally planned to take a lower cost "Silver" plan (post subsidy roughly $200 per month) that had a high deductible ($6000) and high out of pocket maximum ($12000) but I was concerned that the "negotiated rates" might not be the same as I've had in the past.

So ..... after thinking it through, I've made the decision to opt this first year for a "platinum" plan at roughly $600 per month that features a $0 deductible and a $2,000 out of pocket maximum. While the plan will cost me an additional $5,000 in premiums for the year, it does eliminate all concerns about "what might be" in the event of a serious illness or injury.

When providing financial advice, I believe the best true advisors start with understanding what the client needs to be able to sleep well at night. Taking that approach myself in the health care arena, I made the decision that until the dust settles on the ACA and it all starts to sort out, additional premiums of $5,000 per year are a small price to pay for peace of mind.
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Old 10-22-2013, 04:00 PM   #17
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Not necessarily. If the total negotiated procedure fee is the same but the insurance payment rate is lower, the patient co-pay will be larger to make up the difference (subject to deductible/OOP max). As MichaelB said, this form of "cost-sharing" has been going on for years with patients being responsible for increasing cost share.
I'm not sure if this applies to the plans I've had in the last 4 or 5 years. My plan has been sort of HSA-like, but company-centric (not portable): Megacorp contributes $2,000 per year for the family and the first dollar gets paid out of that fund. No co-pays. When the $2,000 runs out, I'm on the hook for 100% (of the negotiated rate) until I hit the high deductable, at which time it becomes more like "regular insurance", where it's 80% them 20% me. But I've never even run out of the $2,000!

If the provider has accepted the insurer's plan, anything the provider attempts to bill beyond the negotiated rate is considered fraud (at least that's what my HR rep told me).

So the bottom line to me is that the negotiated rate is "all me", which is why having real negotiated prices is essential to doing "real shopping".

It seems to me that this arrangement keeps the big-boys (big insurers) at the top of the heap....conventional wisdom has it that the bigger the block of insureds, the more weight they throw around with the providers, the lower the rates they can negotiate. But what if the little guy (little insurer) runs a super efficient shop, can pay the providers the same, but offers the same coverage for less? If I were the little guy, I'd be thinking the deck is stacked against me.
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Old 10-22-2013, 04:07 PM   #18
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Your provider knows how much they get from each insurer for a procedure. Your provider is the best one to answer this question. Insurers don't disclose how much they pay a provider because it is considered proprietary info. They certainly don't want Insurer B to know that they are paying the provider 2% more for the same procedure.
I think you missed my point. My goal is to find the insurer/plan that pays the provider the least, because 100% of those dollars come out of my HSA "bank account". The provider's goal is to make sure I select the plan that pays them the most! We are at odds and they are holding the cards. I doubt I'd get any cooperation.

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At the same time, it is important to understand that while your provider might be getting 2% more for the colonoscopy, they are getting 10% less for an appendectomy.
Totally don't care. Not my problem.

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The best you can do is to use an independent site that give you rates for standard procedures to estimate your costs, then compare the premiums among carriers for similar costs.
Finding rates is nice and everything, but that doesn't help me shop unless I've got something to compare it to. If I had negotiated rates for the insurers that were "competing for my business" , then I'd be able to shop. Without that, it's not possible to really shop.
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Old 10-22-2013, 04:39 PM   #19
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Obviously the insured will pay a percentage (x) of a negotiated fee (y) plus deductible and copayment which are both known. Just solve the simple algebraic problem for each insurer. [mod edit]
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Old 10-22-2013, 04:58 PM   #20
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Obviously the insured will pay a percentage (x) of a negotiated fee (y) plus deductible and copayment which are both known. Just solve the simple algebraic problem for each insurer. [MOD EDIT]
In my case, I'm even more stupid than you imagined because in my plan (and the same goes for how most people interact with their high deductable plans), there's no deductable and there's no copayment. There's just a negotiated fee that gets removed from my HSA "bank account". But I'm afraid that's the rub.

Let me simplify it, so even my pea brain can understand it.

There is one can of beans on the shelf that I'll need in 2014.

There are three companies that offer a policy that says if you happen to need 30 cans of beans in 2014, then we'll do something for you to help you with the cost. If you just need the one can, you're on your own. But not completely on your own, you WILL get the benefit of paying a secret price that we've negotiated with the bean supplier.

So we have a single can of beans with three prices. Depending on which company I choose, my HSA will get hit with one of the three prices. Which of the three companies should I choose when none of the three will disclose the price they've negotiated with the bean supplier?
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