Blue Cross Blue Shield will Discontinue PPO Plans in Texas
At the end of this year. 367,000 Texans will lose their individual health insurance policies because Blue Cross Blue Shield (BCBS) is going to stop offering individual PPO plans on the Obamacare exchanges. The insurer did announce that it will continue to offer HMO plans. Of course, HMO plans are not popular with physicians, hospitals, and patients because they come with a mountain of rules that hinder and sometimes even prevent the delivery of necessary medical care.
PPO plans provide more freedom to patients to make their own decisions regarding their health care. A PPO plan does not require a patient to obtain a referral from his or her primary care physician prior to seeing a specialist. A PPO plan also does not require prior authorizations for every medical service prior to the delivery of the service. An HMO normally requires a hospital to get prior authorization before providing even emergency care. If the hospital and physician(s) treating a patient do not obtain an authorization prior to treating a patient, they will be unable to get paid for the medical care they provide. An HMO is designed to give an insurance company the ability to manage a patient’s care.
An HMO plan provides a small network of physician and hospitals for its subscribers. The provider network is small because the insurance company offers lower payment rates, so it is impossible for physicians and hospitals to deliver medical care without losing money. Insurance companies struggle to find physicians and hospitals willing to accept lower payment rates, so they settle for any physician(s) and hospitals willing to contract with the plan(s), with little concern regarding the quality of care for subscribers.
Blue Cross Blue Shield of Texas lost $400 million on the PPO plans it offered as part of the Affordable Care Act (ACA). BCBS paid for medical care provided to people who purchased ACA plans, but the premiums they collected did not come close to covering the money they paid out for the medical care the ACA patients received. “We felt like losing $400 million is not sustainable,” said Dr. Dan McCoy, chief medical officer for BCBS. The decision to discontinue PPO plans in Texas will not affect PPO coverage offered through employers. This is because in most cases group plans are self-funded by companies, which means insurance companies like BCBS serve as third party administrators tasked with processing claims and providing customer service.
The “private” insurance companies have been federealized through the ACA. Insurance companies are heavily regulated by the federal government to the point that they have to ask federal regulators for permission to raise premiums. If BCBS wants to raise the premiums on any of the plans it offers on the Obamacare exchanges, it has to ask permission from the fedgov bureaucrats.
BCBS of Texas plans to ask the fedgov bureaucrats for a 19.97 percent premium hike on the plans it will offer in 2016. Health insurance companies who offer Obamacare exchange plans are seeking anywhere from a 20 to 40 percent premium increase for next year. Premium increases won’t cover the medical costs for the ACA patients, so taxpayers will have to cover the premiums for the ACA patients and cover the insurance companies’ losses.
The dirty little secret insurance companies and the Obama administration don’t want you to know is that Section 1342 of the Affordable Care Act requires John Q. Taxpayer to cover any losses insurance companies incur selling plans on the Obamacare exchanges. BCBS of Texas will not have to take the $400 million loss on its ACA plans. John Q. Taxpayer is going to foot the bill for the ACA patients and the insurance companies.
BCBS of Texas made the decision to stop selling PPO plans as part of the ACA because the medical costs associated with the patients who enrolled on the plans make them unsustainable. The decision will force at least 367,000 people in Texas to elect a plan that provides a narrow network of physicians and hospitals. HMO plans provide poor care and insufficient access to care, but do provide insurance companies with the ability to manage a patient’s care at the detriment of the patient.
The ACA has destroyed health care in America. It has federalized the entire health care industry. The ACA is an albatross around the necks of the American people, and for John Q. Taxpayer it is another fedgov program he has to cover with his tax dollars. Of course, if the money isn’t there, the federal government will borrow it. Utopia is expensive!