Critics say that Washington state’s rejection of individual health-insurance plans from five companies that applied to sell inside the newly created exchange marketplace will limit consumer choices and hurt continuity of care for those with low incomes.
When Washington state approved individual health-insurance plans from four companies to be sold inside its newly created exchange marketplace, it also rejected efforts by five others.
Now, critics say that rejection will limit consumer choices and hurt continuity of care for those with low incomes.
The plans, targeted at uninsured individuals, are a central feature of the Affordable Care Act, which aims to offer insurance plans through state online exchanges, where customers can easily compare plans and perhaps qualify for free or subsidized premiums.
State Sen. Linda Evans Parlette, R-Wenatchee, said the state is moving in the wrong direction — away from the stated goal of insurance exchanges to “increase choice and competition for health insurance.”
Her colleague, Sen. Michael Baumgartner, R-Spokane, called the insurance office’s actions a “significant reduction in free-market competition.”
State Insurance Commissioner Mike Kreidler said some plans had trouble securing adequate networks of providers or meeting other commercial-market regulations, which he said can pose a significant challenge.
“I fully support competition in the market, but it’s also my responsibility to make sure that plans sold in Washington state comply with state and federal law,” Kreidler said. “It’s also critical that if consumers buy a plan, they’re actually able to use the benefits they’re promised.”
Other critics, including Alison Carl White, executive director of WithinReach, a nonprofit that helps connect families with services, noted that three companies rejected for the Washington Health Benefit Exchange have been approved for patients on Medicaid, the state-federal insurance plan for low-income people.
Because those companies won’t be allowed to sell commercial plans inside the exchange, low-income people, who are more likely to have fluctuating incomes, won’t be able to stay with the same insurance company if their income rises to the point they no longer qualify for Medicaid, she wrote in a blog post. If they have to switch from Medicaid to a commercial plan inside the exchange, they may have to move to a new doctor and provider network.
“I don’t know about you, but I think insurance and health care are already pretty complicated,” White said. “The thought of having to switch my insurance plans when my income level changes would be overwhelming especially if I was new to having insurance, struggling to pay rent or feed my kids and make good parenting decisions.”
On Aug. 1, Kreidler’s office announced that 31 individual plans from four companies were approved to sell inside the exchange.
The approved companies were Group Health Cooperative, BridgeSpan Health Company (an affiliate of Cambia Health Solutions, the parent company of Regence BlueShield), Premera Blue Cross and its subsidiary, Lifewise Health Plan.
The rejected plans were Moda Health Plan (formerly ODS Health), Kaiser Foundation Health Plan of the Northwest, and three Medicaid plans: Coordinated Care Health, a subsidiary of Centene Corp.; Molina Healthcare of Washington; and Community Health Plan of Washington.
Because Lifewise is a subsidiary of Premera, noted Parlette, the Wenatchee legislator, consumers in 19 counties who want to shop inside the exchange will only be able to choose among plans from a single company.
Kreidler gave these reasons for the rejections:
- • Molina didn’t allow access to certain providers, and had no approved retail pharmacy.
- • Coordinated care had no pediatric hospital in its network, and no approved vision network.
- • Community Health Plan of Washington was unable to adjust benefits to meet new cost-sharing requirements, Kreidler said. It also required people, even those in an urban area, to drive more than 47 miles to see a cardiologist and 123 miles to see a gastroenterologist.
- • Kaiser had several health-savings account (HSA) plans that didn’t meet state and federal requirements.
- • Moda wanted to charge the same rates for plans with different benefits. For example, it included pediatric dental benefits in some plans, but rates didn’t reasonably reflect difference in costs.
Kreidler’s office said some of the plans were new to the commercial market, “and it’s a big challenge to meet the criteria to enter that market.”
In Washington, about 1.2 million people, mostly children, are now covered by Medicaid. The state expects provisions of the Affordable Care Act will add nearly 330,000 more people, mostly adults, over the next few years.
Dr. Mario Molina, president and CEO of Molina, said Washington is the only one of nine states that has rejected Molina’s bid to sell inside an exchange.
Currently, Molina, which has operated in Washington since 2000, covers about 413,000 Medicaid patients in the state, and has a large network of providers, including a pharmacy network, Dr. Molina said.
About 10 to 15 percent each year fall off Medicaid because their incomes have risen, and should be eligible for subsidies inside the exchange, he said.
But now, they won’t be able to stay with Molina if they’re not on Medicaid. “People will have to change health plans, and in many cases, change doctors,” he said. That seems to run counter to the notion of promoting continuity of care and making the marketplace more competitive, he said.
Community Health Plan of Washington, which covers about 305,000 individuals and families through Medicaid plans, said the rejection was a surprise and would have negative consequences for the most vulnerable population.
In a statement, the company said its proposed “member-focused and innovative” plans were designed to address “the unique needs of lower-income individuals.” The plans offered unrestricted access to the First Choice Health Network, including a group of Community Health Centers with more than 100 primary-care centers.
“Unfortunately, the OIC seems unable to move away from an outdated model of commercial insurance, which the Affordable Care Act was intended to reform,” the company said.
Coordinated Care spokeswoman Sally Mildren said the company believes being able to sell inside the exchange is important to help low-income customers. But she said Coordinated Care will work closely with the insurance office in hopes of being able to get approval next year.
Kreidler said it’s not surprising there was a lot of confusion the first year of the new requirements. Now, both his office and the companies have a much clearer understanding of what’s needed, he said. For 2015, they’ll begin working with companies as early as March and April, he said.
“While I wish all of the companies who applied had succeeded, I had to hold everyone to the same standards,” Kreidler said. Many more companies have filed to sell dozens of plans outside the exchange, which the insurance office has until the end of September to approve or reject. Individuals who purchase insurance plans outside the exchange will not be eligible for the reduced premiums.