End the surprise insurance gap

New Research Confirms Patients Experience Greater Cost-Shifting and Restricted Access to Care

Date created

Wed, 07/11/2018 - 10:03

 New Research Confirms Patients Experience Greater Cost-Shifting and Restricted Access to Care

New PFC-Sponsored Report Higher Patient Costs for More Restrictive Insurance Networks in Exchange Markets 2014-2017


 Washington, DC (July 11, 2018)New research released today shows that patients are paying more for insurance through higher premiums, deductibles and cost-sharing, while their insurance networks are becoming more narrow and restrictive. Insurance plans with small, specialist-deficient networks and high out-of-pocket costs can put patients at greater risk for receiving surprise bills, especially in an emergency. 


“This research confirms what patients and physicians across the country have known for some time,” said PFC President and CEO Michele Kimball. “Insurers have been systematically narrowing their networks and increasing premiums, creating surprise insurance gaps that patients don’t realize exist until it’s too late. While insurers are making record profits, patients are paying more for less.  This research underscores PFC’s mission – we need a fair solution that ends surprise bills for patients by making sure the insurance they are paying for actually covers them in an emergency – even if they unexpectedly receive out-of-network care.”


“When it comes to health care, nobody likes a surprise,” said Rebecca Kirch, Executive Vice President of Healthcare Quality and Value at the National Patient Advocate Foundation. “This study confirms what we've been hearing from patients for years: there is no real way for patients to avoid a ‘surprise’ medical bill, even when they're insured and try to stay in-network. We need a transparent health care system designed for patients, not profits.”


 In 2018, more than 73% of plans available in the exchange marketplace offered restrictive networks, compared with 48% in 2014. At the same time, the study found that the overall costs for care are increasing faster in exchange markets, with the average Affordable Care Act (ACA) exchange market premiums increasing 28% from 2014 to 2017. Almost 90% of enrollees in ACA exchange plans had deductibles above $1,300 and the average maximum out-of-pocket limit increased by 12% over the past four years, placing a higher financial burden on sicker patients and allowing insurance companies to abandon patients when they’re at their most vulnerable.


In 2017, exchange plans had the lowest inclusion of providers compared to employer-sponsored insurance and Medicare Advantage networks. The study highlighted gaping issues in specialty coverage, showing that Affordable Care Act (ACA) exchange network plans in 2017 covered between 34% and 66% fewer providers than those in other markets, with specialties like anesthesiologists, radiologists, and emergency physicians more often out-of-network in exchange plans.  In some local markets, plans offered between 96 and 99 percent fewer providers.  Additionally, the study’s review of Network Adequacy standards showed that federal standards are particularly inadequate in this area, routinely excluding specialties like radiologists and anesthesiologists from network adequacy reviews.


As insurers are narrowing their networks and shifting more costs to patients, they are also increasing their profit margins. Several top insurance companies saw profit margins in Q1 for 2018 that were the highest in a decade. Aetna Inc. recorded a profit margin of $1.2 billion that was its largest since 2004 and Centene Corp. reported its most profitable quarter since 2008 at $1.8 billion. Four of the largest insurers had profit margins between 5% and 8%, and all six of the largest insurance companies paid their CEOs over $17 million in total compensation in 2017, with several making upwards of $25 million. In short, insurers are increasing their profit margins and reducing coverage, exposing patients to thousands of dollars in surprise medical bills.


A summary fact sheet and full version of the report are available on PFC’s website here: https://endtheinsurancegap.org/research-shows-high-patient-costs-less-access-care.

The report, “The High Cost of Healthcare: Patients Experience Greater Cost-Shifting and Reduced Coverage in Exchange Market 2014-2018” was commissioned by Physicians for Fair Coverage (PFC) and conducted by Avalere, a leading healthcare research firm based in Washington, DC.  Avalere analyzed the Department of Health and Human Services (HHS) Individual Market Landscape Files from 2014 to 2017, as well as data from the state-exchange websites. Additionally, Avalere utilized Strenuus network data for the 2017 plan year to determine the inclusion of specific providers in networks by market.


About Physicians for Fair Coverage

Physicians for Fair Coverage (“PFC”) is a growing alliance of multi-specialty physician practices advocating to improve patient protections and end the surprise insurance gap, while promoting transparency and increasing access to care. PFC is currently comprised of 12 physician practice groups, representing more than 70,000 physicians nationwide who are responsible for the care of 50 million patients annually in more than 3,000 facilities throughout the country. For more information visit: https://endtheinsurancegap.org.


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