Some Kansas health insurers are seeking legal permission to sell network-only plans — with the help of the state’s top insurance regulator.
The office of Kansas Insurance Commissioner Ken Selzer supports a bill that would allow insurers to sell “exclusive provider organization,” or EPO, plans that provide no reimbursement for out-of-network health care except in the case of emergency.
Clark Shultz, a former legislator who is director of government affairs for the Kansas Insurance Department, said in written testimony that the EPO plans would “likely result in a more affordable product.”
But Shultz said the plans legalized under House Bill 2454 also could create problems for consumers if they don’t fully understand what they don’t cover.
“If this bill becomes law, the Department of Insurance will be charged with carefully considering each proposed health insurance plan falling under the new law,” Shultz said. “We ask that when you consider this bill, you also consider any appropriate safeguards to protect consumers.”
Shultz told the House Insurance and Financial Institutions Committee that “we want consumers to know what they’re purchasing.”
After Monday’s committee hearing on the bill, he said some states require companies that sell EPO plans to also sell “preferred provider organization” or PPO plans that offer some reimbursement for out-of-network treatment. That requirement is not part of HB 2454.
Aetna, UnitedHealth Group and Blue Cross and Blue Shield of Kansas City support the bill in its current form.
Melissa Panettiere, a spokeswoman for Blue Cross and Blue Shield of Kansas City, said the bill would allow insurance companies to sell health maintenance organization-like plans without paying an HMO privilege fee that the Legislature increased last year to help balance the state budget temporarily.
Panettiere said the plans would be priced more competitively than traditional health plans that provide some reimbursement for out-of-network care. She said the federal Affordable Care Act is making it harder for insurers to offer lower-priced health coverage.
“We are just looking for other tools in our toolkit to be able to offer our members affordable coverage at a time when it’s becoming increasingly difficult to do so,” Panettiere said.
The privilege fee increase hit Aetna, the state’s largest HMO provider, particularly hard. Steve Robino, the company’s director of state government affairs, said the increase had made it difficult to compete on cost.
“HMO plans were the most cost-effective, cost-efficient plans for consumers,” he said. “That’s changed this year because of the tax change.”
Generally, HMOs differ from EPOs in that EPOs do not require a referral from a specific primary care physician for other care, as long as that care occurs in network. But HB 2454 would allow insurance companies to include referral requirements in their EPO plans, which would make them functionally no different than an HMO plan, although the insurance company would not have to pay the privilege fee.
“HMO plans were the most cost-effective, cost-efficient plans for consumers. That’s changed this year because of the tax change.”- Steve Robino, director of state government affairs for Aetna
Rep. Willie Dove, a Republican from Bonner Springs, said in his private sector work as an insurance salesman, one of the most frequent consumer complaints was realizing that their preferred doctor was not in their insurance network.
Insurance companies that want to sell the EPO plans should be required to inform consumers about limited networks, he said.
“I’d personally like to see something written where the company is responsible for putting that there,” Dove said.
Panettiere said Blue Cross and Blue Shield of Kansas City already does that with its HMO plans.
“We’re very clear to say this is a narrower network,” she said.
Blue Cross and Blue Shield of Kansas City is a separate company from Blue Cross and Blue Shield of Kansas, the state’s largest health insurer.
Mary Beth Chambers, spokeswoman for Blue Cross and Blue Shield of Kansas, said the insurer had no immediate plans to offer new network-only plans that would be allowed under the bill.
“We are comfortable with the legislation passed in 2015 regarding the percentages of HMO privilege fees and health insurance premium taxes, therefore we don’t feel it necessary to offer comments at this time,” she said.