Meet the Exchange-Based Patient

By Dana Beezley-Smith, Ph.D.
November 5, 2013

It’s Jan. 2, and the phone rings with a potential new patient. If the caller carries insurance through your state’s new Health Insurance Exchange (HIX), it will be important to determine the unique coverage details.

What are HIX plans?

To be in the HIX, insurance must be government-certified as a Qualified Health Plan. Most fall into one of four tiers: Bronze, Silver, Gold and Platinum plans that cover roughly 60, 70, 80 or 90 percent of expenses at correspondingly higher premium rates. Catastrophic coverage is typically available only for those younger than 30 years old.

HIX plans must offer federally determined “Essential Benefits,” including mental health and substance abuse services. Plans will vary, however, as to the extent to which they cover these services.

Who are the HIX-based patients?

Kaiser Family Foundation predicts they will represent five groups: those currently uninsured, those losing employer-sponsored insurance (ESI), those with ESI inconsistent with federal affordability and adequacy standards, those previously buying individual policies and those transitioning from Medicaid coverage.

Price Waterhouse Cooper’s (PWC) 2012 analysis finds 2014 participants will be relatively healthy, mostly Caucasian and young (median age of 33). Compared to today’s privately insured, they will be less well-educated and earn less income. Roughly 20 percent will consider English a second language. Due to income fluctuations, “many newly insured Americans are expected to cycle between Medicaid and subsidized exchange coverage.”

HIX plan requirements

HIX plans offer many deductible and co-payment/coinsurance arrangements. The Wall Street Journal reports some policies will also “layer on other limits, such as requirements that patients get referrals to see specialists.” As PWC estimates about 75 percent of 2014 HIX patients will be new to insurance, they may need help in understanding plan requirements.

Brooke Datz at Barton and Associates, an Ohio financial services firm, reports that one of the two HIX carriers in her area allows a flat co-payment of $25 for in-network psychologists’ sessions; visits to non-network psychologists are paid at 50 percent after a $3,000 deductible. The second insurer “will not pay for any psychologists’ visits until a $3,000 deductible is met.” Across all plans, she reports, deductibles range from $1,000 to $6,000.

Advisory services company Avalere Health reported similar deductibles. Among Silver plans in six states they studied, “The average deductible is $2,550 for individual coverage, ranging from a low of $1,500 to a high of $5,000.” Bronze plans require higher deductibles, averaging $5,150 and ranging from $2,000 to $6,350.

According to Caroline Pearson, vice president of the firm, “Consumers will need to balance lower monthly premiums against the potential for unpredictable, expensive out-of-pocket costs.”

Leigh Page of Medscape cites experts’ concerns about payment collection. “This population is not used to paying co-pays and deductibles,” noted Catherine Annulli, senior health consultant at Connecticut’s VantagePoint HealthCare Advisors. “Not only do they have a low income, but they are also expected to have relatively high deductibles and co-pays.” Matthew Katz, executive vice president of the Connecticut Medical Society, agreed. “This is a significant concern. You’ll have large deductibles that you have to bill patients for.”

Some, however, will receive cost-sharing subsidies that lower out-of-pocket expenses. Those with incomes less than 250 percent of the federal poverty level qualify for these reductions, but only if they carry a Silver policy.

Reimbursement loophole

A 2012 federal rule grants subsidized HIX patients a 90-day grace period for premium payment before coverage is canceled. If coverage is eventually dropped, the insurer will reimburse for services occurring within the first 30 days, but not for treatment falling within 31 to 90 days. Psychologists may absorb the costs of these services or try to collect balances from patients with few financial resources.

In an unanswered plea to the administration, the American Medical Association advocated for “accurate, binding and real-time notification” to providers when patients fall behind on premium payments. It appears wise to regularly verify insurance eligibility.

Contract details are key

While psychologists may decide against joining networks for the HIX plans, opting out may not be easy. Those who previously signed an insurance contract with an “all-products” clause are expected to accept any new plan that company offers.

Blue Cross Blue Shield of Illinois incorporates such a clause, reports Page. Its network providers “will automatically be included in its full and narrow networks offered on the exchange.” Those who opt out will close their doors to new patients under other Blues policies.

Industry experts recommend providers review current contracts for such clauses and carefully examine any new amendments they receive. Providers are expected to be notified by the insurer of any changes in reimbursement rates for these plans.

The American Psychological Association also recommends that psychologists inspect contracts for an assignability provision permitting the company to list them in another company’s network. “This provision would also mention whether the insurance company is required to notify you of this assignment and if so, what the notification requirements are.”


Dana Beezley-Smith, Ph.D., is a clinical psychologist in private practice treating children, adults and families in Green, Ohio. She may be reached at
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