With UnitedHealth already set to end its “Obamacare” health coverage in Louisiana next year, the insurance giant is now pulling the plug early with Ochsner Health System, apparently forcing close to 3,000 patients in south Louisiana to find another health care provider or pay more to use Ochsner as an out-of-network provider.
Taking Ochsner — Louisiana’s largest nonprofit health care system — out of the fold five months into the 2016 health insurance period will be a hassle for UnitedHealth’s members, some state and health care industry officials said.
In some cases, patients may be severed from longtime physicians and specialists and forced to travel farther for hospital care, they said.
The two companies said Friday they were unable to reach a compromise for Ochsner to continue in UnitedHealth’s public health insurance exchange program. In a statement, UnitedHealth called it a “routine renegotiation” of a contract.
UnitedHealth members who relied on Ochsner already faced being dropped at the end of the year. The nation’s biggest health insurer notified state officials this week that it will end its “Obamacare” health coverage in Louisiana after 2016.
In a letter to its local customers, UnitedHealth said members of its “Compass” program would have in-network care available elsewhere in the state.
Ochsner’s withdrawal from the network is effective May 15. In its own statement, the local company said it was “unable to reach mutually agreeable terms” to remain with UnitedHealth’s public health insurance program.
However, Ochsner didn’t rule out reconciliation, saying it is “open to discussions with UnitedHealthcare should anything change.”
At least one industry observer expects the two sides will go back to the bargaining table.
“That won’t last,” said Walter Lane, an associate professor at the University of New Orleans who studies health care economics. “There’ll be a shakeout. Somebody’s going to have to give on that.”
“There’s no doubt that there will be inconvenience visited upon these folks as a result of losing their preferred or nearby, or both, health care provider, but the law allows for UnitedHealth to do this,” state Insurance Commissioner Jim Donelon said. “Obviously, they are doing it in order to cut their losses that they have been experiencing.”
Donelon expects the impact “will be minimal.”
Some patients, such as someone who is pregnant or undergoing treatment for an acute condition, may be able to remain with Ochsner for an additional three months, he said.
Follow Richard Thompson on Twitter, @rthompsonMSY.