When I think about calls for increased consumer activation in health insurance selection, I think about how much I like the ideas of increased health insurance literacy, price transparency, and the promotion of competition in health care markets.
But when I see consumers whipsawed as with the current War of the Gargantuas taking place in Northern California, I wonder if consumer activation alone will save us.
In order to have been a savvy purchaser of health insurance through California's Exchange (or, even, outside the exchange through this fall's most recent open enrollment period for commercial insurance), you would also have to have known something about the health insurance and health care services contracting world. Can we reasonably expect consumers to master this, to ferret out what they really need to know?
Most Northern California employers have a fall open enrollment period. Covered California's open enrollment for 2015 runs from November 15, 2014 to February 15, 2015.
Here's what your employer (or exchange) surely didn't tell health insurance shoppers in Northern California this past fall:
1. Blue Shield of California is a huge insurance company, with about three million covered lives in Califonria.
2. Sutter Health is a huge health care provider with, for example, over 4300 licensed acute care beds in California.
3. They bargain fiercely right through and past the open enrollment deadline over the next year's contract rates.
4. Even a behemoth such as Blue Shield of California has, historically, been unable to bring Sutter to heel. Sutter's tremendous market power in Sacramento and the Bay Area is one of the drivers of high health care costs in those areas.
4. Decisions that are made after the close of your open enrollment period — such as their contractual terms or, as announced this year, their decision to maybe not contract at all, may be announced once open enrollment is closed or very near to its closure.
5. The decision by a major provider to exit an established health plan after the close of the open enrollment period is apparently not deemed a qualifying life event allowing for special enrollment under Covered California. California's largest employers have been conspicuously silent on whether such an announcment is a qualifying event for out of open enrollment insurance plan change.
So the chat boards are lighting up. Can it be that a change in a health plan's coverage options in a highly concentrated market such as Sacramento or the East Bay is not a a trigger for special enrollment rights ? You mean you didn't know all this already?
Watch out where Gargantua steps.
x-posted at prawfsblawg
2 thoughts on “Sutter Health vs. Blue Shield: War of the Gargantuas”
Something similar happened to me in the mid-2000s in California. I was working at the VA in West Los Angeles. I had insurance to give me coverage to see a physician with the UCLA Medical Group. Right after the Federal enrollment period ended, I found out that my insurer (I believe it was either of the Blues in California) dropped UCLA. So I had to go to a Santa Monica physician network. I couldn’t see my great UCLA-PCP for a year until the contract was resumed. I don’t know if leaving Federal service was a qualifing event, and I worked in healthcare!
FEP BC/BS and the UC system providers (at least UCSD & UCLA; I believe UCSF as well) have done this several times, as their contracts run July 1 – June 30 while our insurance contracts with FEP run Jan 1 – Dec 31. The answer to your #5 is that for federal employees, no, dropping your providers is not a qualifying life event: we could not have changed insurance plans until the next open period. With a lot of pushing, we found out that there were exceptions that could continue to cover ongoing treatment with the UCSD Comprehensive Cancer Center, at least through the end of the year. Both times that notices were sent out to patients, FEP & UC actually agreed to 1 month extensions (without notification to insurance customers), and eventually came to new agreements.
I suppose that the notifications of termination of coverage for providers sent to patients are a tool of hard bargaining, but that’s a crappy way to treat patients in the middle of cancer treatment.