Highmark Health is cutting reimbursement to doctors by 4 percent effective April 1 for care provided to patients with health insurance bought through the government exchange — the latest effort to trim losses in a market segment that has caused headaches for carriers nationwide.
All Pennsylvania doctors who participate in Highmark’s health insurance plans and treat patients with coverage required by the Affordable Care Act will be affected by the reimbursement cut, said Alexis Miller, senior vice president of individual and small group markets.
The doctors’ pay cut is needed to stem losses in individual health-law coverage as the insurer looks for other ways to stop the bleeding, Ms. Miller said.
“We’re thoughtfully thinking through all the levers we can pull,” she said. “There’s no silver bullet.”
Reimbursement for Highmark’s commercial plans will remain the same, softening the impact of the reduction on the physician practice revenue to an average of 0.5 percent.
Highmark, which dominated the ACA market in Pennsylvania in 2015 with about 280,000 members, lost $222 million during the first year of offering the coverage in 2014. The losses widened to $318 million for the first six months of 2015.
Highmark’s full-year results for 2015 have not been released. The Pittsburgh-based insurer and other carriers nationally that have sustained losses in the segment say the costs of insuring people who may never have had health insurance were higher than expected.
The ACA was passed in 2010 and required everyone to have health insurance or pay a penalty. Online government marketplaces were created where individuals, families and small businesses could shop for coverage. Enrollment for 2016 through the exchanges ended Jan. 31.
Despite the losses, Highmark kept selling individual plans on the government exchange, but began pulling in the reins last year by narrowing medical provider networks and making other tweaks to plan offerings for 2015. Following the lead of other carriers, the insurer also reduced or eliminated broker commissions for the exchange coverage to throttle back sales of money-losing products.
Highmark isn’t alone in sustaining losses.
United HealthCare, the biggest health insurer in the country by membership, has said it was considering exiting the health-law’s individual marketplace, and Blues plans in North Carolina and New Mexico are among the other plans that reported losses.
John Krah, executive director of the Allegheny County Medical Society, criticized Highmark’s latest plan, saying doctors were being punished for the insurer’s pricing miscalculations.
“It’s inappropriate for physicians to experience a reimbursement cut because the premiums for these products have been underpriced,” he said.
“Physicians will continue to provide the same level of care to these patients, but this is simply wrong.”
Kris B. Mamula: kmamula@post-gazette.com, 412-263-1699.
First Published: February 19, 2016, 10:44 p.m.
Updated: February 20, 2016, 4:24 a.m.
