For many people buying an individual health insurance plan through Covered California, being able to get an affordable policy was a dream come true.
About 1.4 million Californians — including 12,256 people in San Luis Obispo County — bought individual and family insurance policies through Covered California by the March 31 deadline.
In this county, 90 percent qualified for a subsidy to help them pay their monthly premiums.
Now the reality is setting in. Many doctors — particularly specialists — don’t take their insurance.
Christine Ahern and Steve Best of Los Osos wondered for awhile if they had bought a worthless Blue Shield policy through Covered California.
The couple had been uninsured since Best closed his eco-friendly air conditioning business four years ago, a victim of the recession.
“We were very anxious for (Covered California) to get started because it was the only thing we could afford,” said Ahern, who works part time in a bookstore.
Best suffers from constant pain due to spinal stenosis and needs surgery, so they saw the new Covered California insurance exchange as a lifesaver.
But they soon found that his primary care doctor’s medical group didn’t take Covered California insurance. Neither did the urgent care center, the pain management center or the orthopedic medical group he went to for his condition.
Finally, they found a general practitioner who did.
“She is a real doctor who puts her patients first,” Ahern said, “My 6-foot-4, 300-pound husband almost cried with the experience of being treated like a real human being after the humiliating experiences he has been through.”
The physician, Dr. Donella Jenkins, also found a neurosurgeon who Best will see for his spinal stenosis.
“For the most part we’re very pleased with Covered California,” Ahern said. “The biggest problem is finding doctors, especially specialists.”
That scenario has been looming ever since the Affordable Care Act was signed into law in 2010. The law required most people to have insurance starting in 2014, while also requiring more from insurance companies.
Insurers no longer can set lifetime coverage limits, offer substandard policies, drop coverage when someone gets sick, or deny coverage to someone with a pre-existing medical condition.
That means a larger pool of individual policyholders with costly illnesses. Insurers have countered by offering contracts to fewer physicians and paying less per service. Insurers say the smaller physician network means each doctor will make up the lower fees through a larger volume of patients.
In California, the state Department of Managed Health Care reviews the individual insurance plans for proper coverage and an adequate network.
The network must be big enough that policyholders are within 30 minutes or 15 miles of a primary care physician, said Blue Shield spokesman Sean Barry.
“There is not a comparable requirement for specialists,” he said.
Barry said Blue Shield’s most popular Covered California policy in San Luis Obispo County has a network with 70 percent of the primary care physicians and 55 percent of the specialists who were in the insurer’s standard pre-2014 individual and family PPO policies.
Blue Shield and Anthem Blue Cross are the only insurers selling policies through Covered California in San Luis Obispo County. Statewide, 11 companies sell on the exchange, and urban counties have up to six insurer choices.
Anthem Blue Cross spokesman Darrel Ng said he couldn’t make a direct comparison between current and past policies. But the physician network for individual policies is narrower now, he said.
Those narrower networks mean fewer options for policyholders.
The problem can be compounded in San Luis Obispo County, where it already was difficult to find a doctor taking new patients.
Steve Key, a Shell Beach music entrepreneur, bought a Blue Shield plan from Covered California, only to have trouble finding a network doctor taking new patients. He is seeing a primary care doctor in Santa Maria.
“We’re OK for now, but the first couple of months were frustrating,” he said.
Key said he was excited when he and his wife qualified for a substantial Covered California subsidy. “I hadn’t had health insurance for several years, and this seemed too good to be true, actually,” he said.
Ng said Anthem Blue Cross offers dozens of choices, but the list isn’t foolproof.
“Doctors don’t report to us whether they’re full or not, so we don’t know if they’re taking new patients,” Ng said. “These are doctors who have contracted with us.”
Ng said he doesn’t hear much about doctors not taking new patients.
“I hear more chatter about this in rural areas, but that’s a matter that goes beyond this issue” to a more generalized physician shortage, he said.
However, rural areas may have an advantage in one respect: less competition between doctors may mean a larger percentage opt to take Covered California policies, Ng said.
That’s because insurers negotiate contracts with doctors using market pressures — competition — to keep payments low.
“That’s especially true in urban areas,” Ng said. “That’s less true in rural areas because if there are only one or two providers, we’re not able to negotiate as much.”
So in rural areas with fewer doctors and state requirements for an adequate network, insurers have less negotiating power. Doctors may be able to get a relatively better deal, making Covered California policies somewhat more appealing.
That’s what cardiothoracic surgeon Dr. David Canvasser found.
His three-physician medical group, Central Coast Cardiothoracic Surgical Associates, signed contracts with both Blue Shield and Anthem Blue Cross through Covered California.
“Our fees are very similar to what we get from Medicare,” he said. “We’re in a specialty where there aren’t any other heart surgeons in the area presently. We sort of expect to be paid what we’ve been getting, and most of the time we are.”
Canvasser hastens to add that those fees are often lower than people expect — he charges $1,600 for an aortic valve replacement, for instance. The high overall cost of the procedure comes from hospital and associated charges.
In contrast, gastroenterologist Dr. Vance Rodgers said negotiations don’t necessarily result in a palatable deal.
His medical group, Central Coast Gastroenterology, has signed a contract with Blue Shield but not with Anthem Blue Cross. It is the only gastroenterology group in the county.
“The offers that were made by the insurance companies were so low initially that virtually every physician in the community said it wasn’t workable,” Rodgers said. “We have to run a business. We have to pay for malpractice insurance, we have to pay for staff, we have to pay for overhead and computer systems.”
More broadly, medical practices need to pay competitive salaries to attract and retain high-quality physicians to the region, he said.
“When you take (insurance) contracts that don’t cover costs, you can’t do that,” he said.
His medical group was able to negotiate a better contract with Blue Shield, but not Anthem Blue Cross, he said.
“Our contracts aren’t universal, and they’re negotiated between two parties,” Ng said. “We offered them a contract, and they declined.”
Rodgers said the onus was on Blue Cross to present a better offer.
“Blue Cross is selling a product, and it’s their responsibility to provide services to those people,” he said.
Whatever the hang-up, the result is that Blue Cross individual policyholders who need a colonoscopy most likely will have to travel at least to Santa Maria to see a gastroenterologist.
The opposite situation exists for women looking for an OB/GYN specialist. Central Coast OB/GYN, which has eight doctors and eight nurse practitioners, takes Covered California’s Anthem Blue Cross plans. So does Creating Harmony Women’s Healthcare, with two doctors and three nurse midwives. But neither medical group takes Blue Shield’s Covered California policies.
Medical practices that contract with both Anthem Blue Cross and Blue Shield, such as Cuesta Medical Group, haven’t seen that promised flood of new patients, yet.
“We’ve probably seen about 50 patients so far with Covered California policies,” said John Ruffner, practice executive. “We haven’t seen a big wave of new patients, and that’s what I’m seeing in the industry news.”
Cuesta has 14 primary care physicians and four nurse practitioners in five offices countywide.
“We wanted to be in Covered California, and so far, so good,” Ruffner said. “Philosophically, Cuesta Medical Group has always taken new patients. We were able to come to terms with Blue Cross and Blue Shield so that it made business sense for us as well.”
Ruffner was less upbeat about the ability to refer Covered California policyholders to specialists.
“That is more difficult,” he said.
Both Blue Shield and Anthem Blue Cross spokesmen said the networks are a work in progress.
“We continue to make adjustments and additions to our 2014 individual and family plan network on an ongoing basis to best meet the needs of our members,” Barry said of Blue Shield.
“We’re adding doctors all the time,” Ng said. “We’ve added thousands of doctors since the beginning of the year.”
Both Ng and Barry said policyholders having trouble finding a doctor should call their customer service line.