Limited Insurance Choices Frustrate Patients In California

Dennie Wright lives in Indian Valley, a tiny alpine community at the northern end of the Sierra, close to the border with Nevada.

Wright works as a meat cutter in a grocery store and lives in a modest home overlooking a green pasture. He also lives in one of the 250 ZIP codes where Blue Shield of California stopped selling individual policies in 2014. As his insurance agent explained it, Wright had only one choice of companies if he wanted to buy insurance on Covered California, the state's health insurance exchange. That lone option was Anthem Blue Cross, so Wright bought one of the Anthem policies.

"That was new to us, you know, Covered California," Wright says. "Anthem Blue Cross was the insurance carrier. Then of course, three months later, I have a heart attack."

More than once, he was flown across the state line to Reno for care. Wright and his wife, Kathy, now have piles of medical bills and insurance paperwork. Though Anthem Blue Cross covers emergency care out of state, it doesn't cover routine doctor care outside a patient's home state. But Wright says traveling from his home to doctors on the California side of the mountains is not as safe or as convenient as going to Reno.

He continues to see the Nevada doctors who put a defibrillator in his chest and saved his life. Anthem Blue Cross will pay some of the bills, but the Wrights still don't know if everything will be covered.

There are other insurance options for Wright, but not through Covered California. Although he didn't need a subsidy, he was left in the same position as people in his area who do need financial help to buy insurance. People with lower incomes can't readily take their business to a competitor, because the state exchange is the only place customers can use federal subsidies to help them buy health insurance. So for these people who are pinched financially, Anthem is the only option.

"I mean, you should have some choices, especially if you're going to have one that's not going to cover you in the places you choose to go," Wright says.

Last July, Covered California Executive Director Peter Lee offered a different impression of choices the marketplace would offer.

"In every corner of the state, consumers will have at least two plans to choose from, and in most areas, where most of the Californians live, they can choose between five or six plans," said Lee during an event to announce the marketplace's 2015 plans and premium rates.

Northern California Pricing Region

Almost half of the Covered California members who have one choice of insurer live in Northern California.

Source: Covered California

Credit: Alyson Hurt/NPR

But in 22 counties in Northern California, there are ZIP codes where there is only one choice of insurer, even if that company offers a few different plans. There are areas around Monterey and Santa Cruz on California's central coast that also have only one carrier.

Blue Shield of California said it had to stop selling individual plans in areas that didn't have a hospital contracted with Blue Shield. The insurance firm said it had offered doctors in those areas rates of payment that would keep premiums low, but not all doctors accepted the payment terms.

Covered California estimates that statewide, there are 28,896 Covered California customers who have only one choice of insurance carrier — slightly over 2 percent of the total exchange membership as of November 2014.

Lee says the exchange is now working to increase the range of choices in places where there are none. But he says the problem predated the exchange.

"The challenges of northern, rural counties have been there for a long time," Lee says, "and are still a challenge that we're trying to address head-on."

He says the exchange is now discussing with others how to bring more insurer competition to these areas in 2016.

"We aren't the solution to all the problems that have always been there in terms of challenges in rural communities, and that's something we're certainly looking at — how to improve access and choice," Lee says. "And we'll continue doing that."

Covered California should help increase the number of insurers, says consumer advocate Anthony Wright from Health Access. And policymakers, he says, should lean on insurers and providers to participate in that market.

"Some of this is a combination of putting pressure on the insurers," he says, "and some of this is trying to do work to actually increase the number of providers on the ground in these areas — whether through more training, [or] incentives to be in some of these more rural areas."

Having more insurers in the marketplace, says Anthony Wright, would make it more likely that people can get the care they need.

"At one level, we're trying to make a functioning market," he says, "but it still means that consumers are at the mercy of the market."

This year, people who want more choice than Covered California offers, must venture into the broader health insurance market — if they can afford it.

This story is part of an NPR reporting partnership with Capital Public Radio and Kaiser Health News.