Exchange Plans Paying Less Than Medicare?

brave-declining-reimbursement-ratesThe benchmark for physician fees is the rate the federal government sets for services provided to older Americans through Medicare. In many markets, commercial plans may pay slightly above the Medicare rates, while doctors say that many of the new exchange plans are offering rates below that.

Physicians are uncomfortable discussing their rates because of antitrust laws, and insurers say the information is proprietary. But information cobbled together from interviews suggests that if the Medicare pays $90 for an office visit of a complex nature, and a commercial plan pays $100 or more, some exchange plans are offering $60 to $70. Doctors say the insurers have not always clearly spelled out the proposed rate reductions.

Source: Kaiser Health News.

Comments (24)

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  1. Billy says:

    I wouldn’t be surprised. Only the government would make a system that’s less beneficial than their current system.

  2. Wilbur says:

    And in the end, the consumer is still suffering.

  3. Stewart T. says:

    “Doctors say the insurers have not always clearly spelled out the proposed rate reductions.”

    Obfuscation by insurance companies? Say it isn’t so…

  4. Tom G. says:

    “Physicians are uncomfortable discussing their rates”

    I don’t like talking about how much I make either.

  5. JD says:

    We’ve had problems like this for as long as there have been government health programs. Medicaid and Medicare are already a bad deal for providers and lower the quality of care for patients.

  6. Dewaine says:

    The more people get on the government dole, the more physician supply problems we’ll have. I would hate to be reliant upon the government in the near future.

  7. Studebaker says:

    Wow! This IS good news. That means my employer health plan puts me at the front of the line — ahead of old folks, poor folks and those getting subsidized by the government — when I need an office visit. Woohoo! No more waiting a month for a doctor’s appointment because seniors got all the available time slots.

    • Bubba says:

      That’s right. Medicare, Medicaid and exchange plan enrollees will have to sign up with a concierge physician practice if they want timely access to a physician.

  8. Bob Hertz says:

    The commenters are filled with hostility toward the government, and I don’t blame them…………

    but the low payments from carriers on the Exchanges are not created or dictated by any government agency.

    These are decisions by the private insurers who have chosen to go onto the exchanges. I do not know of anything either formal or informal in the ACA that is telling insurers what to pay.

    The ACA is of course pushing for low premiums, and that results in low payouts………..but the same thing happened in the 1990’s when HMO’s came to the fore.

    A competitive market is going to drive down fees in medicine. I am not sure this is all bad.

  9. Devon Herrick says:

    @ Bob
    I believe you are correct that it isn’t necessarily bad. I’ve often wondered why health plans and insurers allow enrollees to seek care (say, an MRI or CT scan) at any facility even though prices can vary from $500 to $2,500 depending on where patients seek care. Drug plans have negotiated exclusive agreements with pharmacies for years. The test will be in the marketplace. If plan enrollees prefer low premiums to broad networks, that’s fine with me.

    I’ve talked to insurers who are interested in the concept of narrow networks. A NCPA publication co-authored by Alain Enthoven and Kyna Fong, basically said it’s the ability to say “no” and drive business elsewhere that results in negotiating power. Insurers are experimenting with methods that do precisely that.

    • Perry says:

      Devon and Bob,

      One possible consequence of the high deductibles with the ACA is that more folks will see what things cost. Truly, I don’t think doctor’s visit for most conditions are going to bankrupt a patient. What does cost are the high-end imaging studies and labwork, which in most cases can be had less expensively in non-hospital settings.
      But remember, doctors can only absorb so much to pay for overhead, malpractice, and more importantly the onerous mandates from CMS for Quality measures, EMR, etc, etc.

  10. Linda Gorman says:

    Exchange plans: otherwise known as Medicaid-Plus.

  11. Don Levit says:

    I understand that the ACA stipulates that, over time, Medicare will be paying less than Medicaid.
    If correct, could this assumption represent a large part of the ACA “savings?”
    Don Levit

  12. Bob Hertz says:

    Once again we see the not-so-great effects of eliminating underwriting.

    If insurers cannot exclude bad risks and persons with chronic illnesses, then the least they can do is to discourage those persons from going to see the doctor a lot.

    Paying super low fees to keep doctors out of a network is one way to do that.

    I will say again what I have said before — an Exchange customer who even cares what doctors are in his/her network is a money losing customer.

    This piece does bring to the fore an old question of mine: namely, if insurers are paying such low fees, then why do they have to keep raising premiums?

    The answer is probably this: one premature baby or heart transplant cancels out all the savings from cheapskate fees for office visits, and then some.

    • Bart says:

      And the Bronze-Silver-Gold-Platinum designations don’t seem to address the size or quality of the plan’s network, or what additional costs are covered.

      Personally, I’m pretty flexible about the size of copays or deductibles, assuming both are reflected in the premium. But I do care about max-out-of-pocket and what doctors and facilities are available.

      • Devon Herrick says:

        When I looked there seemed to be a dearth of platinum plans available in the exchange. I suspect that insurers have concluded that adverse selection is too serious a concern to offer these types of plans. The populations most likely to demand platinum plan are older people with pre-existing conditions. It’s doubtful that insurers could attract enough younger enrollees to offset the adverse selection.

  13. Susan says:

    The state insurance departments in some of the states (such as CA) were very aggressive in saying rates can’t be more than $X. There are only so many ways you can get the rates lower – lower fees is one of them – and the easiest.

  14. Bob Hertz says:

    Susan you are right on. If carriers have to offer unlimited lifetime benefits and no exclusions for the most expensive therapies, they will try to pinch pennies on office visits and similar care.

    The wonderful state of CA was also a leader in ordering the cancellation of individual policies.

    In the uproar over mass cancellations, a lot of people assumed that this was an order from Wash DC.
    It was not. States had a lot of leeway to make this process less destructive.