Medical insurance ensures consumers have access to medical care when they become ill. Buying insurance is not like buying something from an online retailer. When a person buys something from a retailer, the item is used immediately. A person buys an insurance plan with the understanding it will be available if an accident or illness occurs. There is a period when a person will not need insurance, but when they do they expect to be covered. When insurance companies fail to negotiate reimbursement plans with medical professionals, the insurance coverage changes, those who bought plans may be left without access to preferred medical providers.
Insurance companies provide access to medical services from a network of doctors, hospitals, and clinics. Insurance companies offer consumers more affordable rates when they visit in-network medical providers. These medical providers have negotiated financial reimbursement fees with insurance companies. Medical providers who have failed to settle acceptable reimbursement fees with insurance companies will not be placed on the insurance company’s provider list and are considered out-of-network. A person facing a health crisis may be forced to access care by a provider who is out-of-network, which may result in refusal or sparse coverage by the insurance company.
The decision to buy an insurance plan is often based on whether a preferred doctor or hospital is considered in-network. A friend bought an insurance plan based on her doctor being in-network. She also liked that her local hospital was a part of the network. She felt as if she was receiving and could potentially access comprehensive care if she should need to visit her doctor or be admitted to the hospital. She was satisfied with her insurance company until the day a letter from the company announced her hospital was now out-of-network. She didn’t know what she would do if she required a hospital stay. Her doctor was still in-network and had privileges at the hospital, but now a stay at her local hospital could cost her thousands of dollars. She didn’t know what to do. She couldn’t change insurance companies, because it wasn’t an open enrollment period. Open enrollment is a period of time in which a person may freely enroll in or change their selection of an insurance plan.
We discussed why her doctor was still in-network and why the hospital was not. Her hospital was unable to negotiate satisfactory reimbursement fees with her insurance company. The failed negotiations led to the insurance company changing the status of her hospital from in-network to out-of-network. The altered state of the hospital creates a dilemma for anyone who bought an insurance plan based on a doctor or hospital being in-network.
For instance, if my friend has an emergency and must go to the hospital she would have to request a hospital that is in - network but further away, risking her well-being. Another scenario must be considered as well. Let’s say she has a health emergency that renders her unconscious or unable to speak. The emergency response team wouldn’t know the local hospital was out of her network and would bring her to the nearest hospital. Being in an out-of-network hospital could result in exorbitant bills which may financially ruin her.
A solution to the dilemma my friend, and countless others face is to enact legislation that would protect consumers. In 2016 a New Jersey State Assembly committee approved a bill that would require hospitals and doctors to reveal to patients before treatment whether the health care provider is in-network or out-of-network. A benefit of New Jersey ’s legislation is the dispute process regarding payment for emergency services provided by out-of-network doctors and hospitals. New Jersey’s law begins to address the dilemma consumers face when insurance companies change medical providers from in-network to out-of-network. However, the effectiveness of legislation such as this is based on the patient’s capacity to consent to care and the medical provider’s ability to run the patient’s insurance quickly enough to determine if the medical provider is in or out-of-network. Insurance companies sell a promise to provide coverage when medical care is necessary. The question of whether medical care once promised is in-network or out-of-network places an undue burden on medical insurance consumers.