In fierce insurance contract debates, NC patients are often caught in the middle
Earlier this month, Wanda Montano received three letters in the mail from her insurer, Humana.
The insurance company, embattled in fierce contract negotiations with Montano’s health care provider, was just weeks away from allowing its contract to lapse.
The first letter informed her that if they didn’t reach a deal, her oncologist would be out-of-network.
The second said her surgeon would be out-of-network.
The final letter told her the entire ECU Health system — which owns almost every hospital within a one-hour drive of Montano’s Greenville home — would also be out-of-network.
Montano, recently in remission for breast cancer, weighed her choices.
If she switched insurers, she would be hit with a wave of paperwork and might even see her health benefits change — the last time she switched insurers, the new company insisted that she switch to different chemotherapy medications that made her feel sicker.
But the prospect of finding a new health care provider, as Humana’s letter recommended, seemed impossible.
“My first thought was: Have you looked at a map?” she said. “There is no other option.”
She ultimately chose to switch to an Aetna insurance plan.
Hundreds of thousands of North Carolinians like Montano have been caught in the crossfire of heated negotiations between hospitals and insurers.
This month, UNC Health warned some patients that they would be pushed out-of-network if the health system didn’t reach an agreement with UnitedHealthcare. Humana sent letters to WakeMed and ECU patients — including thousands of retired state employees — that they would lose in-network coverage in a matter of weeks if their negotiations were not successful.
The hospital’s letter encouraged patients to seek a new insurer. The insurer’s letters encouraged patients to find a new health care provider.
Ge Bai, health care finance researcher at Johns Hopkins University, said these disputes are a result of the conflicting interests of hospitals and insurance companies.
Hospitals want insurance companies to pay more for services, which they say have become more expensive to provide because of inflation and nurse shortages. Insurers want to pay lower rates in order to keep premiums for their members down.
Bai said insurers and hospitals may be more likely to resort to extreme negotiating tactics now that COVID-19 relief money for hospitals has dried up and employers are struggling in the current economy.
Most of the time, she said, insurers and health care providers are able to reach agreements before their contracts lapse. But threatening to sever the relationship — and drumming up concern among patients and members — is now a common negotiating tactic to pressure the other side to compromise.
“They’re playing chicken,” Bai said.
Shirley Bell, a retired state employee, has been caught in two contract disputes in the last two years. When she was insured by UnitedHealthcare, she was impacted by a high-profile dispute between the insurer and WakeMed, which ultimately led to the companies going without a contract for more than four months.
This month, she was upset to find another letter in her mailbox, this time from Humana, describing an almost identical situation.
“We’re caught in the middle,” she said. “They’re trying to see who’s going to be in their corner versus who’s going to be in the other person’s corner. But nobody is being in the client’s corner.”
Duane Smith, another retired state employee affected by WakeMed’s dispute with Humana, said he is holding out hope that the two companies will come to an agreement before their contract lapses.
“We just hope it’s not one that is going to hurt us,” he said.
Teddy Rosenbluth covers science and health care for The News & Observer in a position funded by Duke Health and the Burroughs Wellcome Fund. The N&O maintains full editorial control of the work.
This story was originally published October 25, 2023 at 5:45 AM.
