Insurers Push Plans Limiting Patient Choice of Doctors

As the Obama administration begins to enact the new national health care law, the country’s biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals.

The plans, being tested in places like San Diego, New York and Chicago, are likely to appeal especially to small businesses that already provide insurance to their employees, but are concerned about the ever-spiraling cost of coverage.

But large employers, as well, are starting to show some interest, and insurers and consultants expect that, over time, businesses of all sizes will gravitate toward these plans in an effort to cut costs.

The tradeoff, they say, is that more Americans will be asked to pay higher prices for the privilege of choosing or keeping their own doctors if they are outside the new networks. That could come as a surprise to many who remember the repeated assurances from President Obama and other officials that consumers would retain a variety of health-care choices.

But companies may be able to reduce their premiums by as much as 15 percent, the insurers say, by offering the more limited plans.

“What we’re seeing is a definite uptick in interest because, quite frankly, affordability is the most pressing agenda item,” said Dr. Sam Ho, the chief medical officer for UnitedHealth’s health-care plans.

Many insurers also expect the plans to be popular with individuals and small businesses who will purchase coverage in the insurance exchanges, or marketplaces that are mandated under the new health care law and scheduled to take effect in 2014.

Tens of millions of everyday Americans will buy their coverage through those exchanges, a vast pool of new customers, including many of the previously uninsured, whom insurers expect will be willing to accept restrictions to get a better deal.

“What this does is eliminate the Gucci doctors,” said Peter Skoda, the controller of the Haro Bicycle Corporation, a Vista, Calif., business that employs 30 people. Facing a possible 35 percent increase in its rates, Haro switched to an Aetna plan that prevents employees from seeing doctors at two medical groups affiliated with the Scripps Health system in San Diego. If employees go to one of the excluded doctors, they are responsible for paying the whole bill.

“There wasn’t any pushback,” Mr. Skoda said. Haro’s employees are generally young and healthy, he said, and they rarely go to the doctor. Instead, they want to make sure they have adequate coverage if they go to the emergency room.

The company’s premiums average $433 a month, Mr. Skoda said, with employees paying one-fourth of the expense. A few employees opted for more traditional coverage, enabling them to go where they please. But they are paying significantly higher deductibles and out-of-pocket costs that could add thousands of dollars to their medical bills.

The last time health insurers and employers sought to sharply limit patients’ choice was back in the early 1990s, when insurers tried to reinvent themselves by embracing managed care. Instead of just paying doctor and hospital bills, insurers also assumed a greater role in their customers’ medical care by restricting what specialists they could see or which hospitals they could go to.

“Back in the H.M.O. days, it was tight networks, and it did save money,” said Ken Goulet, an executive vice president at WellPoint, one of the nation’s largest private health insurers, which is experimenting with re-introducing the idea in California.

The concept was largely abandoned after the consumer backlash persuaded both employers and health plans that Americans were simply not willing to sacrifice choice. Prominent officials like Mr. Obama and Hillary Rodham Clinton learned to utter the word “choice” at every turn as advocates of overhauling the system.

But choice — or at least choice that will not cost you — is likely to be increasingly scarce as health insurers and employers scramble to find ways of keep premiums from becoming unaffordable. Aetna, Cigna, the UnitedHealth Group and WellPoint are all trying out plans with limited networks.

The size of these networks is typically much smaller than traditional plans. In New York, for example, Aetna offers a narrow-network plan that has about half the doctors and two-thirds of the hospitals the insurer typically offers. People enrolled in this plan are covered only if they go to a doctor or hospital within the network, but insurers are also experimenting with plans that allow a patient to see someone outside the network but pay much more than they would in a traditional plan offering out-of-network benefits.

The insurers are betting these plans will have widespread appeal in the insurance exchanges as individuals gravitate toward the least expensive options. “We think it’s going to grow to be quite a hit over the next few years,” said Mr. Goulet of WellPoint.

The new health care law offers some protection against plans offering overly restrictive networks, said Nancy-Ann DeParle, head of the office of health reform for the White House. Any plan sold in the exchanges will have to meet standards developed to make sure patients have enough choice of doctors and hospitals, she said.

Ms. DeParle said the goal of health reform was to make sure people retained a choice of doctors and hospitals, but also to create an environment where insurers would offer coverage that was both high quality and affordable. “What the Congress and the president tried to accomplish through reform is to transform the marketplace by building on the existing system,” she said.