CHATTANOOGA, Tenn.—Angela Allen has two painful slipped disks in her neck, but her regular spine doctor does not accept the new insurance she bought through the federal health marketplace.
“It’s been a nightmare,” said Allen, a 42-year-old office manager.
The closest specialist she found who would see her and take her insurance works 34 miles away in another county. Allen belatedly learned that her physical therapist also is out of network and she owes $900.
Yet these restrictions carry an enviable price tag. At $187 a month, Allen’s policy is cheaper than almost any other midlevel, or silver, plan in the nation. Just a few miles across the Georgia border in Catoosa County, a similar plan would cost someone Allen’s age $348—86 percent more. “These new rates are really, really good,” said Russ Blakely, a Chattanooga insurance broker.
Chattanooga’s success in achieving bargain-priced policies offers valuable lessons for other parts of the country as they seek to satisfy consumers with insurance networks that limit their choices of doctors and hospitals. Nationwide, about 70 percent of the lowest-priced plans included narrow networks, according to McKinsey and Company.
But few places have put them into place as successfully as here in Eastern Tennessee, where BlueCross BlueShield of Tennessee, the area’s dominant insurer, cut a low price deal with one of the three big hospital systems to be the sole provider in their cheapest network. If all areas of the country had such low premiums, the federal government’s tab for subsidizing part of the cost of policies—totaling an estimated $29 billion for the fiscal year beginning October 1—would be dramatically lower.