For many consumers, the biggest decision when selecting an Affordable Care Act (ACA) health insurance plan is the type of plan that best meets their health-related and financial needs. After all, they all have their advantages and disadvantages. These include those for pricing, covered conditions and treatments and available doctors and facilities.
But for enrollees who want a Preferred Provider Organization (PPO) plan, the news may be disappointing. A recent study noted that over the last year, available PPO options throughout the nation’s exchanges declined significantly. It was found that 39 percent have been reduced and 28 percent disappeared completely. As a result, consumers are purchasing plans they’re not very thrilled with. These plans are more restrictive, with more limited coverage when visiting out-of-network medical providers.
Explaining the popularity of PPOs
PPOs provide beneficiaries with the flexibility to visit both in-network and out-of-network health providers and facilities. Referrals are not required from primary care physicians. These plans may have higher costs, although some are free, as they provide basic services. Generally, PPO plans may be better for patients with their own doctors.
In its first two years, the ACA exchanges provided a wide array of plan options. In 2014, PPOs made up 35 percent of all available silver plans. Silver plans are the healthcare law’s benchmark, paying 60 percent of healthcare costs. And while the number of silver plans nearly doubled in 2015, available PPOs only increased to 39 percent. And now, these plans seem to be disappearing from the exchanges.
Fewer plans are a big concern
According to the report from the Robert Wood Johnson Foundation (RWJF), America’s largest health-related philanthropy, the shrinking amount of PPOs is a big problem. “This is a serious problem if you think one of the purposes of the Affordable Care Act is if you like your doctor, you can keep your doctor. That’s no longer true in many areas of the country,” says Seth Chandler, a law professor at the University of Houston’s Health Law and Policy Institute.
The RWJF study found between 2015 and 2016, the number of marketplace PPOs fell by 41 percent. Only 33 percent of PPO offerings on the exchanges remained the same. During this period, 28 percent of carriers dropped their plans completely, while 39 percent reduced their available plans. The carriers explained that they dropped the PPOs because their high expenses made it impossible to afford price exchange products.
As of Dec. 2015, consumers in New York City were unable to enroll in a PPO, either on or off the exchange. They were only able to visit out-of-network doctors through employer plans. And while 19 PPOs were available in Houston last year, in 2016, none are left. For those PPOs remaining, some have lower-quality benefits. The study found that the number of silver-level PPOs with no maximum out-of-network limit increased from 14 in 2015 to 30 in 2016.
As many consumers prefer low monthly premiums, they’re okay with restrictions on out-of-network charges, except in emergencies. And while this is not a big deal for healthy enrollees, those with medical problems may prefer PPOs, which are more expensive, but offer greater benefits. But this can increase prices, driving away more consumers. Insurers claim to be losing money on PPOs, as well. Many Americans below the age of 65 have coverage through their employers. Therefore, they may select plans providing some reimbursement for out-of-network care.