Washington state’s insurance commissioner has officially issued controversial regulations for insurers, dictating not only what services must be covered but how close providers must be, down to the mile.
The new rule requires that insurance companies ensure “adequate networks for medical providers of sufficient number and type to ensure that Washington enrollees can access covered services without unreasonable delay.”
State insurance commissioner Mike Kreidler planned to issue the regulations last week but put off the decision amidst outcry from both insurers and hospitals — an odd alliance for industries that are typically opposed.
“The fact that both sides are not happy does not translate to this being a reasonable compromise,” said Barbara Gorham, a spokeswoman for the Washington State Hospital Association. “What it means is that the process hasn’t been given enough time.”
“I wish we had more time to work with all the interested parties,” Kreidler said. “Unfortunately we don’t have that kind of time if we want to move into the 2015 filings.”
Insurers have just a month to reformulate their health care plans to fit the extensive requirements. Proposal for 2015 coverage are due to the insurance commissioners office May 1.
The new rules require insurers to cover a number of variables that could hinder a patient’s access to health care. Insurers are now required to provide wide-enough networks that any patient on any plan will be able to make an appointment with a primary care doctor within 10 business days. For specialists, the time limit will be 15 business days.
On top of time limits, the rules require “reasonable” distance limits as well. All networks must have “such numbers and distribution” that 80 percent of enrollees within the area the health care plan covers live or work within 30 miles of a “sufficient number” of primary care providers in an urban area, or 60 miles for rural areas.
And if that’s not complicated enough, there are blanket quotas for primary care providers as well. The ratio of enrollees in the plan to in-network primary care providers within that service area must at least meet the average ratio for the entire state.
Insurance companies, unsurprisingly, took issue with the intensive regulations.
In reality, the rule will “collapse choices that ought to be available to individuals and employers,” Mel Sorensen of the Washington Association of Health Underwriters argued at a public hearing last week. Price competition year-to-year would have been fostered in the old system, according to Sorensen — those left out of many networks for 2014 could have been encouraged to accept lower reimbursements the following year, absent the new regulation, sparking “hotter, more competitive bidding.”
A spokeswoman for one of the state’s narrowest networks, Coordinated Care, argued that the rule makes things more complicated for insurers, but doesn’t actually help patients. The rule ups costs but with “negligible or no gain in access to quality health care…this was not the goal of the Affordable Care Act.”
The state’s new rules leave insurers little leeway to change their plans at all. Obamacare regulations have dictated that insurers must cover all essential health benefits — a slew of health services ranging from emergency services to prenatal care (yes, for men as well) to mental health services. They’ve also targeted customer payments by limiting deductibles and other out-of-pocket costs to $6,350 a year while upping annual limits on health plans.
Before the exchange launched, Kreidler’s office fought insurers on their premiums as well, forcing them to lower rates by 1.8 percent before being accepted.
Washington insurers are left with few options to cut their costs. With Obamacare regulations mandating a wide array of covered services and Kreidler’s rules mandating a wide array of covered providers, the last remaining option is upping premiums.
It’s possible other states will follow Washington’s lead in regulating its way out of the health care law’s unintended consequences. Narrow networks have caused an outrage across the country since Obamacare regulations have upped costs to insurance providers.
The Wall Street Journal warned in February that California, New Hampshire, Mississippi and Pennsylvania are all considering options to limit insurers’ ability to offer narrow networks.
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