Alternative Plans Could Leave Consumers Paying More

By Consumers For Quality Care, on March 19, 2019

As consumers seek lower-cost alternatives to ACA plans, many have turned to alternatives like short-term limited duration policies or Christian-sharing ministries.

These plans carry risks and could leave consumers paying more, not less, according to NPR and Kaiser Health News.

These risky plans are presented as alternatives for consumers who cannot afford the premiums of traditional ACA plans but do not qualify for subsidies. The premiums for these alternative plans are typically 15 to 30 percent lower than traditional plans. Insurers are reinterpreting ACA rules to create these alternatives, which can make them more risky and costly in the long run.

For example, the new policies avoid the federal law’s rule limiting consumers’ annual in-network limit on out-of-pocket costs. One policy manages that by having no network — patients are free to find providers on their own. And the other skirts the issue by calling additional charges “premiums.” Under ACA rules, premiums don’t count toward the out-of-pocket maximum.

Blue Cross Blue Shield of North Carolina’s “My Choice” plans have no set network of providers. Instead, consumers are free to find and see any provider they choose. The plan only pays out 40 percent above what Medicare would pay for a service and it is the consumer’s responsibility to negotiate those rates with the provider.

“[I]t’s an innovative way to put matters into the hands of patients as consumers,” [Wake Forest health and policy expert Mark] Hall says. “Let them deal directly with providers who insist on charging more than 140 percent of Medicare.”

Bind Benefits, a Minnesota start-up partnering with UnitedHealth Group, is offering “on-demand” plans, which eliminate annual deductibles. Instead, consumers pay flat copayment amounts for a number of services, like physician visits and prescriptions. However, not all services are covered by the plan.

Patients who discover during the year that they need any of about 30 common procedures outlined in the plan, including several types of back surgery, knee arthroscopy or coronary artery bypass, must “add in” coverage, spread out over time in deductions from their paychecks.

Both plans rely on consumers’ ability to comparison shop and negotiate with providers. In emergencies, this can be impossible for consumers. In the best of circumstances, it can still be extremely difficult. In either case, consumers could wind up with hefty balance bills.

“There are a lot of people for whom a plan like this would present financial risk,” says [Jeff] Levin-Scherz [a health management consultant].