Helen Hunt Photo

Do Healthcare Consumers Really Have a Choice? Is This As Good As It Gets?

Few movie scenes are as memorable as Helen Hunt’s obscenity-laced rant against Health Maintenance Organizations (HMOs) in the 1997 Oscar nominated movie, As Good As it Gets, in which she and co-star Jack Nicholson each earned best acting awards. “#@%&# HMO #@%&# pieces of #@%&#,” Hunt proclaims.

But more striking than her performance was the audience reaction to the now infamous tirade. In movie theaters across the country, audiences applauded and cheered. The scene has been cited as a tipping point in consumer backlash against the restrictive provider networks of HMOs. It helped fuel the movement to give consumers more choice – giving a boost to Health Savings Accounts. As HMOs lost their luster, consumer-directed health plans gained popularity. Choice trumped control.

But in the words of Jack Nicholson from another famous movie scene, this time in The Shining, “Here’s Johnny… I’m back.”

For the upcoming open enrollment period, many large health insurers have announced that the only plans they will offer on the government-run health exchanges are provider-restricted, HMO-styled narrow network plans.

In Illinois, some 350,000 consumers insured by Blue Cross and Blue Shield of Illinois are being told they are no longer able to keep their current plans that give a wide choice of providers. In Texas, about 367,000 customers of Blue Cross are being told the same. In Pennsylvania, Highmark is taking similar action.

According to news reports more than half of all plans available at healthcare.gov in 2016 will be restrictive narrow-network plans. (A narrow network plan is defined as plan that includes between 31% and 69% of the hospitals in a service area; a broad network has at least 70%, according to the industry benchmark established by McKinsey Consulting.) Why are insurers doing this? It helps them control costs. And they are able to pass on some of those savings to consumers. On average narrow network and HMO-styled plans are about 17% less expensive.

That said, health insurance premiums are still increasing, on average, by about 15% over plans sold last year on government-run exchanges, although there are wide swings in prices between insurance carriers.

And don’t forget health insurance deductibles are increasing – seven times faster than health care inflation or wages, according to a new Kaiser study.

All of this leads consumers to ask, “What happened to choice?”

It is still out there, but for many it is a bit of a Hobson’s Choice, especially for newly insured, lower income Americans who can only afford health insurance because of the premium subsidies offered by the federal government as part of The Affordable Care Act (also known as ACA or Obamacare.)

If you buy health insurance directly from insurers in the so-called “off-exchange marketplace” you will almost always get a wider selection of providers and get the same health insurance benefits – Obamacare requires that all plans provide equal “essential benefits” – but you will not be eligible for a premium subsidy.

At HealthCare.com, we feature the widest selection of plans – more than 120,000 offerings from over 200 insurance carriers – both on-exchange and off-exchange. Consumers can compare plans that are eligible for premium subsidies, and those that are not.

Does it make sense to forgo a premium subsidy in order to buy a plan without a subsidy? Sometimes. The more income you make, the lower the subsidy. So if your subsidy is small – and if you plan to have healthcare expenses and want a wider choice of providers – in certain circumstances it might make sense to forgo a subsidy.

Choice sometimes trumps cost.

But each individual circumstance is different. That’s why it is important to shop and compare plans. Each consumer needs to determine what is most important for them – cost, choice or a little of both.

But unlike back in 1997, thanks to Obamacare, no one can be denied health insurance. You are not stuck with your HMO, or your insurance carrier. You are free to move to a different company every year.  If you have a pre-existing condition, you can’t be denied access to insurance.

Which brings me to another famous movie scene from the 1976 film Network in which award-winning actor Peter Finch screamed to all who would listen, “I’m mad as hell, and not going to take this anymore!”

Remember: You’re in charge. You don’t have to take it. You have choices.

Search and compare health insurance plans on HealthCare.com.
Search and compare health insurance plans on HealthCare.com.

photo credit: Helen Hunt Net Worth via photopin (license)