The New Jersey Neurosurgical Society and the New Jersey Doctor Patient Alliance today commended Assemblyman Jon Bramnick for exposing apparent fraud with health care plans sold through the Individual Health Coverage (IHC) and Small Employer Health (SEH) markets.
The plans, sponsored by the state Department of Banking and Insurance (DOBI), recently underwent rule changes that effectively strip away health benefits previously enjoyed New Jersey residents. The plans insure some 770,000 lives in New Jersey.
As of January 1st, 2017, DOBI has permitted insurance carriers to sell out-of-network (OON) policies that reimburse based on Medicare. This is a radical departure from the historical standard, which had been Usual, Customary, and Reasonable (UCR).
The insurance carriers now reimburse OON as low as 110 percent of Medicare.
“Today, Assemblyman Bramnick finally exposed this apparent fraud,” said Dr. RW Raab, a Wayne-based neurosurgeon speaking on behalf of the New Jersey Doctor-Patient Alliance and the New Jersey Neurological Society. “It is time for politicians to reign in the insurance industry and protect our citizens.”
Raab said OON benefits, based on Medicare, are meaningless.
“They amount to no OON benefit at all, because the patient is stuck with an unexpected, and unaffordable balance bill,” Raab said. “Medicare pays a neurosurgeon less, for saving a human life, than the neurosurgeon has to pay a plumber to fix a sink. Yet, insurers charge high premiums for these worthless plans, and embed exorbitant cost sharing, with deductibles that can run over $10,000.”
Rabb said the unsuspecting public is being duped.
“Health care consumers have no warning that the expensive OON policies they purchase will not get them access to providers outside their already narrow and ultra-narrow networks,” Raab said.
Prior to these rule changes, supporters claimed that limiting OON physician reimbursement would help control runaway costs and insurance premiums. In fact, the opposite is true.
“Despite the promised reductions, premiums continue to spiral out of control,” said Dr. Pete DeNoble, a Wayne-based orthopedist and president of the New Jersey Doctor-Patient Alliance. “This year alone, premiums in the IHC/SEH market have increased by over 10 percent. Clearly, the insurance industry has not passed savings along to its customers. They have padded their profit statements instead, all the while leaving New Jersey citizens without access to the quality care they deserve.”
In their push for emergency OON legislation, the insurance industry makes similar claims that restricting provider reimbursement will help lower premiums and costs. Politicians who support A-1952/S-1285 constantly make this promise.
Yet, evidence from other parts of the country, such as California, Florida, Illinois, and Maryland, where similar laws have already been passed, demonstrate that these promises are false. Costs in those states continue to soar unchecked.
To find out more about how our health care dollars are being siphoned off by the insurance industry, read our position paper on the subject.