Blue Shield Weighs In

question-markIf you’ve been listening to my weekly health care corner on The Stephanie Miller Show or following me on Twitter, you know I’ve been asking questions about California Blue Shield and its Covered California plans. Just coincidentally, I’ve had occasion to use my new Blue Shield insurance a handful of times over the course of the last few months. Nothing serious (thank goodness), but I needed (among other things) an x-ray for a sports-related strain, a routine mammogram, and a primary care visit for a toenail that decided to grow in instead of out. Over the course of my personal interactions, I discovered a handful of issues related to my new health insurance plan. First, Blue Shield’s website listed physicians and facilities as in-network with their PPOs when the physicians and facilities themselves insisted they weren’t. And I heard two different variations on why the physicians and facilities weren’t participating. The first was that they hadn’t been invited to participate. The second was that if they were invited to participate, they were offered reimbursement rates 30% lower than what they had agreed to in the past.

This led me to dig around a bit and speak out a lot, and in response, I got letters like the following from Scott in Humboldt County, CA that reads in part:

My wife and I signed up for the silver plan because the website said our doctor was on it. We were very excited when our rate was dropping from $500+ a month for catastrophic coverage ($6000/person deductible with $30 copay) to $94 a month for a great plan ($1500 deductible with similar copy). However, now that have tried to use it, we have learned that only one clinic in the entire county is truly on the plan. All the other doctors opted out because of the low reimbursement rate, which means if I – or most of the others in the country who are on this program – want to see a doctor in network we have to drive a couple of hundred miles (to the Bay Area).

When I called Blue Shield to confirm what was going on, they told me my doctor indeed was in network. I called his office and they said they definitely were not; the reimbursement rate was too low. I called back Blue Shield and they insisted he was. When I pushed on the rep, she said, “Oh, he’s in a different program, not yours.” I asked then “Why is he listed in my program?” She didn’t know. (I have been told by several people that their doctors are also listed but not on the program.)

You can read the letter (reprinted with Scott’s permission) in its entirety here.

I reached out to Blue Shield corporate to ask about physician participation, reimbursement rates, website “errors,” etc. To their communications department’s credit, they did get back to me quickly and as thoroughly as can be expected. And I do have to thank Jackie – their extremely proactive customer service representative – who reached out to me on Twitter and both followed up on a personal claim issue and handed me off to corporate for an official response to my policy and practices questions.

You can read my back and forth with corporate here. I believe full transparency is important. But if you’re looking for a short executive summary, here’s the gist:

  • Contrary to my earlier assumption, Blue Shield says if you buy an individual or family plan (as opposed to a group plan), it will be the same regardless of how you buy it. Buying through the Covered California exchange allows you to get a subsidy (help paying for your premiums) if you qualify, but Blue Shield insists its plan offerings are the same on and off the exchange.
  • Blue Shield claims it worked with providers over the past several years to negotiate plans with lower reimbursement rates in exchange for the promise of more patients. This is contrary to everything I’ve heard from doctors themselves. In fact, many of the physicians and facilities I’ve spoken with aren’t looking to beef up their patient load. They simply want to keep the patients they’re already seeing. But since many of those patients have switched to Blue Shield, and Blue Shield is cutting the network by cutting reimbursement rates, physicians aren’t gaining anything but frustrated patients.
  • Blue Shield claims it updates its provider directory weekly. This may be true, but it’s not updating weekly with accurate information. You really have to call your doctor directly and ask if he’s in-network. And be aware, he may not even know for sure.
  • And finally, there’s this:

It’s also important to note that between the 11 qualified health plans participating in covered California, consumers have access to a broad choice of over 80-90% of the practicing physicians in the state.

That’s great if one person has 11 plans. But telling me that your 11 plans together cover 80-90% of the market does not tell me anything useful as an individual consumer.

Again, I think I got as much out of Blue Shield corporate as I could at this stage, and while they had a lot to write, I’m fairly certain much of what they claim is wrong. I still believe slashing reimbursement rates is an insurance company scam to cut down on expenses while protecting profits. I find it unlikely any physician willingly agreed to a 30% cut.

So what can we do about all this? Well, we can start by giving the state insurance commissioner some muscle.

In November, Californians will be asked to vote for a ballot measure called the Insurance Rate Public Justification and Accountability Act. Right now, CA’s insurance commissioner can review proposed rate hikes, but he can’t do anything about them:

“At the end of the day, the companies can tell us to pound sand,” says Dave Jones, the insurance commissioner in California, one of 13 states where the rate reviews are not binding. “It’s very frustrating. Frankly, our hands are tied behind our back.”


When commissioner Jones found Aetna’s small-employer rate hikes unreasonable in April, the health insurance company ignored the ruling, raising those plans’ annual premiums by an average of 8%, and increasing some as much as 21%. “I have no authority to actually enforce a reasonable rate here,” Jones says. “At the end of the day, the health insurers and HMOs have the ability to set the rates wherever they see fit.”

Expect insurance companies to fight the ballot measure by claiming any additional regulation will force them to leave the marketplace, cut services, etc. But keep in mind, they’re already cutting networks but cutting payments and raising rates indiscriminately. And the ‘poor us’ song and dance loses a bit of its charm when you read this:

A July 2010 report from PricewaterhouseCoopers concluded that the law’s state-based health care exchanges provide private insurers with a lucrative new market in which they stand to gain up to $200 billion in revenue by 2019.

Are you encountering issues with a newly-purchased individual or family health insurance plan? Are you a physician or other health care provider running into health insurance obstacles? I’d love to hear more. Leave me a comment here OR send me a note on Facebook. Be sure to let me know where you live, who your insurer is, and what plan you have.

Let’s see if we can’t continue to get to the bottom of this together.

ACA Aftershow


I made my usual weekly appearance on The Stephanie Miller Show this morning and fielded a lot of questions for which I didn’t have all the information handy. So as promised, here are some explanations and links to help you navigate a few of the issues that came up.

1. My husband and I are married but file taxes separately. Can we get subsidies through the health insurance exchange?

It looks like the answer to that question is no. According to, your spouse and you must file a joint tax return in 2014 in order to access the possibility of qualifying for  health insurance premium assistance. H/t to @secondgen on Twitter for the link.

2. I am trying to help my sister in Arkansas qualify for a health insurance subsidy but am having difficulty finding the answers I need. What else can I do?

US News and World Report has a good, comprehensive Arkansas health insurance resource page which includes how to reach the Arkansas Insurance Department Consumer Services Division should you still have difficulty finding what you need through  In fact, has a health insurance guide with a drop-down menu for every state.

3. When I retire, I will have a lower income than I do now. I may qualify for a subsidy. What income do I include when estimating how much I am going to make?

The tax link in answer 1 also includes this information. Here it is again. Note the drop-down menu at the bottom has some additional questions and answers.

4.  Are newly available dental benefits under Medi-cal due to the Affordable Care Act?

Nope. It looks like the good news comes as the result of a state Assembly Bill that restores some dental benefits starting May 1, 2014. You can read more about it here (pdf) and here.  The main website for these links is here.

Feel free to contact me either on Twitter  (@jackischechner) or Facebook (/jackischechnertv) should you have any additional questions or concerns. Hope this helps!