With open enrollment for health insurance just around the corner, now is the time for patients to take a close look at their plans and really read the fine print. Unfortunately, this isn't as easy as it should be. High premiums, high deductibles and limited coverage for patients make the calculus of this decision complicated. At the same time, one of the major problems Alaska patients still face is a lack of true transparency about costs. Even with fair estimates from doctors, without knowing insurance payment rates, it's impossible to calculate the out-of-pocket costs a patient can be responsible for after insurer reimbursement. And, as insurers work to undermine the 80th-percentile rule, which currently protects patients from out-of-network costs, there is even more uncertainty.
After serving as an orthopedic surgeon in the Air Force for more than 20 years and then transitioning into the private health care sector, I was faced with one of the grimmest realities within the medical profession: how confusing insurance coverage and costs can be for patients.
One of my patients came in last month for a consultation ahead of her scheduled total knee replacement. This is a major procedure and she's unable to walk right now, but her number one concern was figuring out how much her insurance was going to cover. Doctors and hospitals can provide a good faith estimate, but with little transparency from insurers, we have no way of knowing how much the patient will owe after surgery.
Alaska's new transparency law requires providers to post prices of their most commonly performed procedures. Without more clarity on what insurers will pay, this information won't mean much, especially if state lawmakers take away the current 80th-percentile rule that protects patients from huge bills their
insurance plans won't cover.
Patients are paying a lot each month in insurance premiums, but are often shocked that their plans have high in-network and out-of-network deductibles that can mean they have to pay thousands of dollars out-of-pocket before their insurance coverage even kicks in. My office employs six people to help patients navigate their insurance coverage. I often think about how unique this is to health care – my mechanic, for example, doesn't employ people to help me understand my car insurance coverage.
But patients are often facing long wait times, as well as incomplete or even inaccurate information from their plans. It can take our billing experts hours and several calls to get to the bottom of a patient issue. With insurance companies increasingly offering "narrow network" plans, on top of existing specialty and
physician shortages in Alaska, patients are surprised to find that there are often very limited numbers of in-network providers they can access, as for specialty services. Premera just announced for 2019 it will narrow its non-emergency network outside of Alaska for individual plans to only Washington; this is alarming news for Alaskans who spend time in one of the other 48 States or patients currently getting specialized care or treatment.
Currently, the 80th-percentile rule helps protect these patients who unexpectedly, either through an emergency or having no other options, have to utilize out-of-network care. This state protection says a patient's insurance company has to pay a fair portion of the out-of-network charges the patient would otherwise need to cover. When insurance covers these costs directly with providers, patients aren't caught in the middle and don't receive huge out-of-network bills. But, right now, insurers are trying to limit this rule and take away this protection.
In emergencies, patients have little control over where they will go for treatment or which doctors care for them. We also know that things don't always go as planned and good faith estimates may not match the final cost of care if there's an accident or something goes wrong. In these cases, it's important to makesure patients are still protected, by maintaining the 80th-percentile rule.
While the Legislature took a step last session toward improving transparency, it will only work if the system is fully transparent, and right now, that isn't close to being the case. Insurance service payment rates differ from provider to provider, so a doctor with a higher charge rate might actually end up costing less out-of-pocket for a patient, depending on their insurance plan. Yet insurance companies prevent providers from disclosing these payment rates, and insurance companies themselves make it difficult to get the information. Without improved information about insurance plan rates, the system will never be fully transparent, and patients still won't be able to make the best decisions.
On top of the lack of transparency, Alaskans are being steered toward care based solely on cost with no consideration for quality, which leads to a higher percentage of misdiagnoses and bad health outcomes, ultimately costing patients, doctors, insurance companies and the state more in the long run.
As we approach open enrollment season, transparency around costs and understanding what plans cover are both important. Patients should look beyond their premium payments to consider how high deductibles and narrow networks might impact their ability to access the services they need.
All of us in health care have a crucial role to play in improving transparency. We need to make sure patients are able to access accurate information from their providers and accurate information from their insurance company about what their plans cover and what their cost-sharing responsibilities are. Additionally, we need to advocate together for patient protections like the 80th-percentile rule that protect patients from unexpected bills.
Dr. Eli Powell is an orthopedic surgeon in Anchorage and the former hospital commander at Elmendorf Air Force Base in Alaska and Balad Air Base in Iraq. He has more than 30 years of experience in health care. Dr. Powell is a member of the Board of Trustees for the Alaska State Medical Association.