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<p>There are more offerings on the insurance marketplace created by the Affordable Care Act, but this year’s plans have some issues.

By Rose Hoban

When Charlotte chef Mark Zink had knee surgery last year, most of the cost was covered by his company’s health insurance.

“Our deductible was $750, which was a huge jump from the year before,” said his wife, Beth Howard, a freelance health writer. “There was a co-pay of 20 bucks for doctor visits.”

Their share of the surgery and physical therapy afterwards came to about $1,100.

A proponent of the Affordable Care Act celebrates in front of the US Supreme Court after the ruling in summer 2015 which upheld the law. Photo credit: Virginia Pickering, flickr creative commons

Then earlier this year, Zink was laid off his job teaching culinary skills. His COBRA plan was expensive, but Howard said they ponied up until year’s end. Then Howard went looking for health insurance for herself, Zink and their 16-year-old daughter on the insurance marketplace created by the Affordable Care Act.

She got a surprise.

Howard is considering two plans, both with Aetna. One has a premium of about $350; the other one is around $500.

“I haven’t quite figured out the difference between the two,” Howard said with a laugh. “I want to figure that out before I make a final choice, but we’re definitely going with Aetna.”

Howard’s experience, and her confusion, aren’t unusual.

In North Carolina, this year’s plans on the ACA marketplace are marked by higher deductibles and premiums and so-called “narrow” networks, which limit the doctors patients can visit.

Rates jump

Costs for health care are rising slower than they have in years, according to an analysis compiled by insurance consulting company Aon. For mid-size and large companies, cost increases were 3.2 percent in 2015. But the same analysis found consumers paying more, even when they’re covered by their employers.

And in the individual market, families like Howard’s are paying even more.

“We will have to spend almost $3,000 before anything really kicks in,” Howard said of the silver-level plans she looked at.

She said that although her family qualifies for a subsidy, it’s hard to predict what she and Zink, now both freelancers, might make next year. If they do take the subsidy, they might end up having to pay some back if their income rises.

“So we are going to be using only some of [the subsidy],” Howard said. “I would rather not have a big, ugly reconciliation at tax time.”

Howard’s not complaining: She said she’s happy she has a plan to sign up for and that with the subsidy it will be pretty doable.

“At first, I was just, like, ‘Why is this happening to us?’” she said. “But when I saw who else was in the clinic that day when I went to see the navigator, it was quite humbling. These were people who were definitely on the fringes. That’s who they are trying to sign up.”

Paying more with fewer choices

Plans for some of those people will cost more, according to state Insurance Commissioner Wayne Goodwin. North Carolina had one of the highest, if not the highest, premium increases in the country for ACA marketplace plans – about a 27 percent jump on average.

N.C. Insurance Commissioner Wayne Goodwin. Image courtesy NC DOI

Goodwin could not elaborate on which plans have the steepest increases and which will experience a slower rate of increase, because by state law those details are designated as “trade secrets.”

Davidson resident Donna Pollack is one consumer likely to pay more. Last year, she had a Blue Cross and Blue Shield of North Carolina plan that she liked.

That plan was canceled.

So Pollack is now looking for coverage for herself and her 20-year-old daughter. She’s found herself frustrated by the narrow choices in doctors.

Two lower-priced BCBSNC plans are available in northern Mecklenburg County, where Pollack lives. To her frustration, her family practice recommended against both plans, because the plans force patients to choose between either Novant Health doctors and hospitals or providers from Carolinas Healthcare System.

“The practice doesn’t want to be affiliated with a particular hospital,” she said. “They want to give patients the option of what hospital to go to.”

Adding to her frustration, one of her daughter’s doctors still hasn’t decided which plan to participate in. So Pollack will likely have to choose a more expensive BCBSNC plan just to keep her options open.

[pullquote_left]People who want help signing up for insurance can call 1-855-733-3711 to find out who in their county can help them.[/pullquote_left]These “narrow” networks are how insurers negotiate deeper price discounts with doctors and hospitals, explained UNC-CH health economist Mark Holmes.

“If I’m an insurer, I can go to Hospital A and say, ‘You’re competing with Hospital B. We’ll pay you below the usual and customary rate, but you get everyone in the county,’” Holmes said.

Hospitals end up accepting the lower rate in exchange for the increased volume.

“It’s starting to approach some of the qualities of an HMO … in the sense that there are fewer people in network,” Holmes said.

North Carolina consumers are not the only ones experiencing this. According to an analysis by the national consulting firm McKinsey, narrowed networks make up about half of the marketplace offerings nationwide.

Goodwin said part of the problem in North Carolina is that only three companies – BCBSNC, Aetna and UnitedHealthcare – are offering plans.

“We have only one company in the state that is in every county, and it appears that for it to continue in every county it is narrowing its networks,” he said.

Goodwin expressed concern for rural counties, which have fewer choices to begin with; narrow provider networks in these plans make the problem more acute.

He said he wanted to push insurers harder, but that his hands are tied because the state declined to set up its own exchange. He’s also limited by state law from working with federal officials.

“I have limited ability to negotiate leverage or push back on rates that are available,” he said.

Goodwin noted that many folks will move into lower-priced plans rather than pay the higher premiums, and that the majority will qualify for some subsidy. Last year, 92 percent of people who signed up for marketplace plans qualified for a subsidy. A different analysis done by McKinsey found that about 60 percent of consumers who choose the lowest-priced silver plans will see a price decrease once their subsidies are factored in.

Balancing act

“My job is also a balancing act between trying to keep prices affordable and keep access to insurance, and at the same time make sure that the companies that do choose to do business here are solvent,” Goodwin said.

For example, Blue Cross and Blue Shield of North Carolina lost $113 million in 2014, a loss the company blamed on the Affordable Care Act.

Holmes said part of that loss came from all the new people BCBSNC is covering.

“Plans have a good sense of their current members, but here’s not only a new membership but also people who decided for years not to have insurance,” Holmes explained. “Was this because they were so healthy they didn’t need it, or so sick they couldn’t afford it?”

“That’s why companies had such a hard time pricing their plans,” he said, speculating that BCBSNC had priced its plans too low last year.

Both Holmes and Goodwin laid part of the blame for the premium increases on North Carolina’s refusal to expand Medicaid. Some people who could have qualified for Medicaid are scraping together enough to buy a marketplace plan because they’ve got health issues to deal with, adding sick people to the mix.

“Many folks who would’ve had coverage [under Medicaid expansion] are buying into the market. And since Blue Cross is the only carrier that is statewide, it takes, and must take, these particular folks,” Goodwin said.

In addition, hospitals are still having to spread around the costs of uninsured people who show up at emergency rooms and clinics, Goodwin said. Hospitals end up charging paying patients more, which, in turn, drives up insurance costs.

“I hate to say I told you so, but I told folks this was going to happen,” Goodwin said, pointing to states where Medicaid was expanded and that have more robust insurance markets. Many of those states have lower premium increases.

“Not to say that we would be the best state in the country in terms of rates, but we would have been a lot better than where we are right now,” Goodwin said.

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