Photo: Josh Denmark/Creative Commons
Some Insurance Companies Ask Their Customers to Cross the Border for Care
Health Care

Some Insurance Companies Ask Their Customers to Cross the Border for Care Is the practice going to spread?

By and Photo: Josh Denmark/Creative Commons

Before dawn on a Wednesday in January, Cesar Flores, a 40-year-old employed by a large retail chain, woke up at his home in Chula Vista, California. He got in his car and crossed the border into Tijuana. From there, he headed for a local hospital, where he got lab testspart of routine follow-up to a kidney stone procedure. He had his blood drawn and left the hospital at 7:30. He arrived home before 10. 

Uninsured Americans have long known that seeking medical care abroad is often more cost-effective than seeking it at home. Even after you factor in travel expense and time off work, you still often come out ahead. A hip replacement that would cost $75,000 for an uninsured patient in the U.S. is $9,000 in India. A heart bypass in the U.S. runs about $210,000; in Thailand it’s $12,000. According to Patients Beyond Borders, a company that facilitates medical tourism, those savings drove about 900,000 Americans to leave the country for medical procedures last yeara number they estimate is growing by 15 percent per year.

But Flores’s situation isn’t medical tourism as we know it. Flores has insurance through his wife’s employer. But his insurer, a small, three-year-old startup H.M.O. called MediExcel, requires Flores to obtain certain medical treatment at a hospital across the border. In part due to cost-pressures generated by the Affordable Care Act, other sorts of plans that require travel have the potential to expand. With this prospect looming, it’s important to ask: What’s the impact on patients? Are these insurance plans regulated? And, perhaps most importantly, are they ethical?

 

The phenomenon first took off in California because of its proximity to much less expensive Mexican providers and because of the cultural connections of the large Chicano population. In 1998, California became the first state to pass a law accommodating cross-border care. American employers wanted to provide health insurance for Mexican working along the border, and it made sense to offer them care where they lived or felt most comfortable. California lawmakers weren’t trying to pioneer a cost-saving measure: The law requires that Mexican health plans be “exclusively for the benefit of Mexican nationals.” 

But this requirement has not been strictly followed. MediExcel determined it would violate anti-discrimination laws to offer the plan only to Mexicans, and a spokeswoman for a much larger Mexican insurer for U.S. workers, SIMNSA (40,000 insured) said the provision has been “widely interpreted.” An executive at Flores’s wife’s employer, Medical Center Pharmacy, was not even aware of the Mexican residency requirement. She said that only about one-half of MediExcel employees who have Mexican insurance are Mexican nationals, and one-third are not even Mexican-American. And if it weren’t clear enough that these plans are no longer just about convenience for border-residents, in 2008, a MedExcel executive founded a (now defunct) company with no connection to the border at all: It contracted to send patients to a hospital in Monterrey, a northeastern Mexican city over 1,000 miles from California.

Other plans have arisen, toooutside California and offered by U.S. insurance companies. Nathan Cortez, a law professor and one of the leading scholars of medical tourism, writes that the four biggest insurers in the United States (Aetna, Humana, UnitedHealth, and WellPoint) are already experimenting with cross-border plansall in the absence of state and federal law directly addressing the phenomenon.  BlueCross BlueShield of South Carolina has contracted with providers in Thailand, Singapore, Ireland, Turkey, and Costa Rica for its high-deductible, low-premium plans, which tend to be used by cost-conscious employers for lower-wage workers. (Other than California, only Texas, under pressure in 2007 from a powerful medical lobby, has addressed the issue head-on, banning any plan that requires patients to leave the country.) Given the likelihood that more companies will notice the potential cost-savings of mandatory cross-border care, this is an important moment to ask: Is care across the border essentially a cheaper version of what patients would get at home? 

Even within the U.S., comparative quality is notoriously difficult to assess. The ACA has tried to establish baseline metrics for U.S. hospitals, but much remains to be done. Across borders, it is even harder to evaluate. A report from 2006 points to facilities in India, Thailand, and Antigua, that “are comparable to the best in industrial countries.” But the report and others endorsing medical tourism are also riddled with the language of conjectureresearchers “doubt” that domestic hospitals do better or conclude it’s “unlikely” Indian hospitals do worse. The MediExcel facilities in Tijuana resemble a standard, functional North American hospital, and, anecdotally, Excel’s patients seem happy with their care. MediExcel did not respond to a request for hard effectiveness data from the company.1 

With quality so hard to compare, there is little protecting the patient. Market pressures are of limited use. Insurers don’t have much incentive to attract customers by contracting with the best providers abroad. Americans tend to change insurance policies less often than would behoove them (only about one in six per year). And small companies with more than 50 employees, now required by the Affordable Care Act to provide health insurance for their staff, often want to pay as little as possible. Their employees, many of whom are poor or near-poor, often want the lowest possible premiums. The court system doesn’t compel quality either. It’s generally very hard to sue insurance companies when a provider does something wrong, and it’s additionally complicated when dealing with foreign entities.2 

Nor has the government provided much reassurance or guidance. In a part of the economy known for excessive regulation, cross-border plans have fallen through the cracks. Neither the federal governments nor the states have significant laws or rules in place governing such plans. And even where there are rules, they often aren’t enforced, like in California. Most insurance law is state law, and plans with foreign providers just aren’t on most state insurance commissioners’ radar. Other than California and Texas, no states have focused on mandatory-travel insurance plans.3

 

The Affordable Care Act offers little clarity on the matter. The law has provisions that could affect mandatory-travel plans, or not, depending on how regulators interpret them. To qualify for the state and federal exchanges, for example, plans can’t “have the effect of discouraging the enrollment in such plans by individuals with significant health needs.” Would making patients travel discourage sicker people from signing up? The law also says exchange plans have to offer “sufficient choice of providers.” Would plans like MediExcel, which offer services only at a single hospital, be able to meet that bar? The questions go on.

The Department of Health and Human Services, which is tasked with carrying out the ACA, hasn’t done much yet to define these provisions, either. Starting in 2017, states will be able to apply to HHS for a waiver of many ACA requirements, as long as they can prove that the alternate system provides coverage “comparable to that provided for” in the Affordable Care Act. It will be up to HHS to determine whether cross-border plans are comparable.

Should HHS encourage international-provider plans, or nip them in the bud? And more fundamentally, how should we feel about a system that provides more poor people health care, but care for which they have to separate from their families and leave the United States, and care that isn’t as regulated and might not be quite as good?

The ACA commits us to evening out the quality of the medical care that all Americans get. Explicitly allowing cross-border medical plans, however, might be a way to do through medical travel what we feel not-quite-right doing domestically: Let people get very differentpossibly inferiorproducts depending on what they can (or want to) pay. That won’t sit right with many progressives, but in the words of Nathan Cortez, “if our health care system … does not offer affordable care domestically, it is difficult to make the normative argument that foreign providers should not be allowed to fill these gaps.”

The best outcome we can hope for may be to leave the structure in place but allow some give when it comes to medical tourism. In some ways, the ACA leaves that space. HHS has the authority to issue regulations that encourage careful experimentation. If they play their cards right, and state regulators play along, mandatory-travel health plans have the potential not just to bend the cost-curve and get more people covered, but also to provide a useful control: Which regulations of more traditional plans and hospitals are actually serving patients, and which are needless costs? That could improve health outcomes for all Americans.

1

Attempts to do exist to push insurers and providers through better metrics, but there is reason for skepticism. The Joint Commission, a nonprofit that certifies American hospitals—and determines whether they are eligible for Medicaid reimbursement—has started an international arm to guide medical tourists. But the commission’s decisions are based on whether hospitals follow a precise set of procedures—not the outcomes of their patients. Plus, the commission’s revenues depend on the number of hospitals it accredits; it has a very high rate of accreditation and low rate of revocation.

2

Although a wronged patient could sue insurers for negligent selection of providers, those suits have tended to fail. Moreover, some states have made HMOs immune altogether from negligent-treatment suits.

3

Some common state laws, like requiring specific quality-management programs, may be challenging abroad but could be implemented. Mandatory coverage requirements (abortion, IVF, gender-transition) similarly could be met, even if it required adding in-network local providers for those procedures. Other common state laws, like those limiting the difference between what plans can charge for in- and out-of-network doctors to, say, 15 percent, could be fatal to mandatory-tourism plans if states decided to enforce them: Insurers couldn’t pass on the full savings of foreign providers when patients could just decide to go to an out-of-network domestic provider for 15 percent more.

Adam Teicholz is a legal analyst and producer for ABC News. Glenn Cohen is a Professor of Law at Harvard Law School and Co-Director of the Petrie-Flom Center for Health Law Policy, Biotechnology and Bioethics.

This article has been updated

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