Insurance Mergers and Network Shrinkage Hurts Consumers

I have a good friend who is seven months pregnant with her first child. Her employer-sponsored health insurance is with PacifiCare, which recently merged with United HealthCare. Ever since her first prenatal visit in April, she has been seeing a nurse-midwife and an OB/GYN with whom she feels very comfortable. She had planned to deliver her baby at Rose Medical Center in Denver, where her doctors deliver. But over the summer, United HealthCare and Health One were unable to negotiate their contract, so Health One hospitals are no longer in network for United HealthCare in Colorado. There are eight HealthOne hospitals in Denver, including Rose Medical Center. So now it looks as if my friend is going to have to go to another hospital for the birth, and will be assigned whatever doctor is on call at that hospital when she happens to go into labor. Most women very much value the relationship they have with their doctor during pregnancy, and she is understandably not thrilled to have someone else deliver the baby. But she cannot afford to pay out of network charges at Rose, so she doesn’t have a lot of options.

Now that United HealthCare merged with AMS, PacifiCare, and Golden Rule, they are a giant company. So is Health One. It doesn’t seem that it can be benefiting anyone to have two of the biggest players in the health insurance/health care industry battling each other. The merger with PacifiCare happened just before the lapse of the Health One contract, and it seems that both events have had a negative impact on health insurance consumers. PacifiCare stopped offering individual/family health insurance policies in Colorado about three months ago, when they were annexed into United HealthCare. Their policies had been a popular option among consumers, and filled a niche for low-deductible, comprehensive coverage with competitive rates along the front range. Those policies are no longer an option, and United HealthCare doesn’t cater to the same niche. United Healthcare merged with Golden Rule several years ago, and has specialized in high-deductible plans and HSAs. They do offer low-deductible plans, but not at competitive rates. So the end result has been a decrease in the number of options consumers have when looking for individual health insurance in Colorado.

It will be interesting to see what happens in January when insurance companies typically announce their rate increases. Consumers now have fewer options for health insurance, and United Healthcare clients have fewer options for hospitals and outpatient facilities. Does that mean that they will be paying less for their insurance?

tags: health insurance in colorado PPO

About Louise Norris

Louise Norris has been writing about health insurance and healthcare reform since 2006. In addition to the Colorado Health Insurance Insider, she also writes for healthinsurance.org, medicareresources.org, Verywell, Spark by ADP, and Boost by ADP, and Gusto. Follow on twitter and facebook.

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