OBAMACARE will Limit your choice of Hospitals

Joy Houng is shopping for health insurance for next year. Her biggest priority right now is to find a plan that covers her monthly visits to specialists at Cedars-Sinai Medical Center in Los Angeles. 

So far, she has found one plan that includes Cedars-Sinai—but it doesn't cover other services that she needs. "I want to be treated by the same doctors I've been seeing for years," said Ms. Houng, a 27-year-old project manager in Sherman Oaks, Calif., who is being treated for chronic pain. Her current policy with Blue Shield of California will expire in March because it doesn't meet all of the 2010 health-care law's requirements for benefits offered. "The thought of losing all these people is absolutely terrifying," she said.

Many plans being offered now on the new insurance exchanges sharply limit the number of hospitals where services are covered, according to a new McKinsey & Co. report. Insurers are making a bet that price is more important to consumers than choice, and limiting the number of hospitals and doctors allows them to keep the cost of a plan as low as possible. Many of the new plans offered still are more expensive than current plans because they offer more benefits.

About 20 million people are expected to buy coverage on the federal and state-run exchanges by 2016. "This is the grand experiment," said J. Mario Molina, chief executive of Molina Healthcare Inc., which sells insurance on exchanges in nine states. "We're going to find out what consumers value more, choice or price." 

According to the McKinsey report, which looked at federal and state-run insurance exchanges in 20 cities including Los Angeles, Atlanta and Houston, about 60% of health plans offer coverage at a smaller number of hospitals than comparable current individual plans. McKinsey identified 120 health plans in those markets by examining federal and state exchange filings, as well as provider information listed on individual insurer and hospital websites. Some of these new plans limit coverage to one or two large hospitals.

The number of hospitals accepting insurance from a consumer who buys coverage on the exchange could be 60% lower than the number of hospitals in current individual plans, according to the McKinsey report, which included the 20 largest hospitals in each market that it measured.

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