As HMOs Dominate, Alternatives Get Costlier


“Out of network providers were causing carriers to lose a lot of money, and they really needed to put their thumbs down on that,” Hempstead said.

Hempstead found that there will be fewer or no silver-level PPOs in 22 states next year. Federal records show there will be none in Miami and most Florida counties, much of Texas, New Mexico, New York and many counties in Mississippi and South Carolina.

The price gap between PPOs and HMOs is growing in many places where both are offered. In Chicago, the least expensive silver PPO next year will cost $270 a month, $75 more than the least expensive silver HMO, and 27 percent more than the cheapest silver plan costs now. Meanwhile, the price of the least expensive silver HMO in Chicago is dropping by 12 percent.

In Salt Lake City, the premium for the only silver PPO is growing by 30 percent, nearly four times the increase for the least expensive HMO. In Philadelphia, the cheapest silver PPO will be $389, $113 more than the cheapest HMO. This year, Philadelphians wanting a silver open access plan had to pay just $66 more. As in many places, insurers also are selling different bronze, gold and platinum PPOs (the metals indicate how the insurer and patient divide the cost of care), but the cheapest plan in each tier in Philadelphia is an HMO.

In Houston, the only plans available through the federal exchange have closed networks. Blue Cross Blue Shield of Texas, which offered a PPO plan in Houston for 2015, cited rising costs as a reason it will not offer any open access plans next year. There is at least one PPO that consumers can purchase directly or through a broker, offered by the Memorial Hermann Health System, but it is not listed in the federal marketplace offerings so premium subsidies are not available.

“Everyone is up in arms,” said Jo Middleton, a Houston insurance broker. “I do not have a single client who is happy. They want PPOs and can’t get them. They want the flexibility.”

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