HOUSTON - (Nov. 10, 2014) - An analysis of more than 100 health insurance plans across Texas offered under the Affordable Care Act (ACA) shows that plans can differ significantly in premium cost and the number of hospitals included in insurance networks. That's just one of the findings of a report released today by the Episcopal Health Foundation and Rice University's Baker Institute for Public Policy.
The report examined "Silver" health insurance plans offered by insurers within the ACA's Marketplace. Texas is divided into 26 different geographic areas, with different numbers of insurers marketing plans in each area. Consumers must purchase a plan option within the area where they live. The majority of Texans who purchased Marketplace plans chose a Silver plan.
Researchers discovered that consumers living in larger cities with more health insurance competition actually pay slightly higher premiums than consumers in smaller-population areas with fewer plans. Monthly premiums averaged around $14 less per month in smaller areas where there were only one or two insurers offering plans, compared to larger-population areas with five or more insurance companies offering many more options.
"The economics of market competition suggest that areas with more insurers and more plans should have lower premiums, but our research shows that is not happening in Texas," said Vivian Ho, the chair in health economics at Rice's Baker Institute, a professor of economics at Rice and a professor of medicine at Baylor College of Medicine. "Insurers may have been expecting sicker populations to enroll in large cities, because healthier people may already have coverage from large employers. Larger cities also have more hospitals offering the most-advanced treatments, which raises costs."
Researchers found big differences in the number of hospitals available in the networks of health insurance plans. While Houston and Dallas both had plans offering networks of up to 100 hospitals, the median size of insurance networks in Texas was just four hospitals. Some insurers offered plans with no hospitals included in their network. In areas with limited hospital availability, consumers may face higher out-of-pocket costs if they visit a nearby out-of-network hospital in an emergency.
The report also found that plans offering more hospitals in their network are not always more expensive. Researchers did find premiums for plans with more than 20 in-network hospitals were about nine percent higher than plans with 10 to 19 hospitals. However, the report showed that premiums for plans with five to nine network hospitals available were actually slightly lower than the costs of plans with less than four hospitals in their network.
"In the upcoming enrollment period beginning Nov. 15, the number of insurers offering plans is predicted to increase," said Elena Marks, CEO of the Episcopal Health Foundation and a nonresident fellow in health policy at the Baker Institute. "It's important for consumers to re-evaluate their plan options to make sure they make the choice which best fits their needs. Features like premiums, deductibles and network coverage may change in the plan they currently have. New plans may also be available in their area."
Marks said Texas is expected to have 16 insurers offering ACA health insurance plans in 2015, up from 12 in 2014. That would make Texas one of the states with the most participating insurers. Researchers also believe many of those insurers will likely continue to use limited providers in their networks and high deductibles as a way to control costs and prevent large increases in premium costs.
The full report is available online and includes a detailed list of the plans and premiums available across Texas, plus a list of hospital networks of insurance plans for each area.
The report is the 10th in a series on the implementation of the ACA in Texas co-authored by Marks and Ho.
For more information or to schedule an interview with Marks, contact Brian Sasser, director of communications at the Episcopal Health Foundation, at firstname.lastname@example.org or 832-795-9404.
To schedule an interview with Ho, contact Jeff Falk, associate director of national media relations at Rice, at email@example.com or 713-348-6775.
The Episcopal Health Foundation: http://www.episcopalhealth.org
Follow Rice News and Media Relations via Twitter @RiceUNews.
The Episcopal Health Foundation was established through the 2013 transfer of the St. Luke's Episcopal Health System by the Episcopal Diocese of Texas to Catholic Health Initiatives. The Foundation is a 501(c)(3) not-for-profit corporation that operates as a supporting organization of the Episcopal Diocese of Texas pursuant to Section 509(a)(3)(B)(i) of the Internal Revenue Code. The Foundation works to improve the health and well-being of the 10 million people in the 57 counties of the Diocese. We embrace the World Health Organization's broad, holistic definition of health: a state of complete physical, mental and social well-being and not merely the absence of disease.
Founded in 1993, Rice University's Baker Institute ranks among the top 15 university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute's strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes -- including a public policy course -- and student leadership and internship programs. Learn more about the institute at http://www.bakerinstitute.org or on the institute's blog, http://blogs.chron.com/bakerblog.