Image: Pete Ryan

Imagine the nightmare: Your two-year-old has a lump in his neck. His pediatrician refers you to Seattle Children’s hospital, the city’s nationally recognized pediatric center, for some tests—today. Each CT scan can run into the thousands, but that’s the last thing on your mind. After all, this is why you have health insurance. 

Except that under the new Affordable Care Act—better known as Obamacare, sometimes in scare quotes—several Washington state health insurance plans don’t cover Seattle Children’s. The couple with the toddler, real people who arrived at Seattle Children’s in January, were armed with a plan they’d purchased on the new state health plan exchange but were denied coverage for the diagnostic scans; they’d be forced to pay out of pocket. In fact, the premier Seattle kids’ hospital is out of reach for thousands of kids. Tykes locked out of hospitals? What is this strange new insurance world we live in? Most of us couldn’t decipher the strange old world.

The Affordable Care Act’s implementation in late 2013 was fraught with nationwide website crashes. But in Washington state, by some measures Obamacare has been a success: By mid-February had welcomed more than 600,000 state residents into the bureaucracy of health insurance. Starting April 1, Washingtonians who haven’t enrolled in a plan will face a tax penalty—but those already on a plan are on a steep learning curve.

Under the ACA, insurance plans must cover certain essentials, including maternity, mental health, and laboratory services. Plans are certified by the state’s Office of the Insurance Commission, and meeting all those benchmarks, insurers warned when the ACA passed, was not gonna be cheap. “Almost two years before the exchange opened, Premera, and particularly [its subsidiary] LifeWise, were saying there were going to be 70 percent rate increases,” says the commission’s public affairs officer Stephanie Marquis. But in the end the increase came to only one-tenth of that. So whether the colossal predictions were simply posturing, or whether the insurers were avoiding costs by not covering expensive services at hospitals like Seattle Children’s, the state approved the plans.

Seattle Children’s has the region’s only top-level neonatal intensive care unit, its only pediatric transplant center. Combined, Premera and LifeWise account for 63.2 percent of the half million plans sold on Washington’s state exchange. Are none of the kids on those plans allowed through the door? Not quite. Kids in need of treatment not available elsewhere—liver transplants, severe burns, etc.—are still qualifying for coverage.

It’s the less severe cases like the two-year-old with the lump on his neck that will be hit with out-of-pocket expenses when consumers choose Children’s. Although technically he could have had a CT scan at another local hospital, Seattle Children’s says its retrofitted CT machine and toddler-trained staff were superior, even necessary; it filed an exception with the insurance company. And it was denied. The hospital went ahead with the scans—and ate the cost—then issued a press release in January highlighting the 125 patients in a “dire situation” that it had treated for free, despite those patients being covered by some form of insurance. Children’s claims the exceptions that it has filed only got a response—any response—from insurance companies 10 percent of the time. For its part, Premera says that 70 percent of the exceptions it received through January 29 from Seattle Children’s had been approved.

In October, Seattle Children’s filed a lawsuit in King County Superior Court, alleging that the state OIC “abused its discretion” by allowing insurance companies like Premera/LifeWise, Molina, and Coordinated Care to sell plans that excluded Children’s. Nationally, Seattle Children’s became a talking point for Obamacare haters: Forget death panels, picture sick kids locked out of hospitals. However, the lawsuit has already sparked change. In February Seattle Children’s reached a verbal agreement with insurer Molina; it’ll be in-network for all the plans Molina sells on the exchange. And the lawsuit has been moved to the OIC’s administrative judge, who will decide whether Children’s should be required to be covered on all exchange plans, like Premera/LifeWise and Coordinated Care. Also on the horizon: ratings for every insurance plan sold on the exchange. They’ll be aggregated from consumer feedback, so in the future buying an insurance plan will be a little bit more like scanning Rotten Tomatoes. Angry patients could translate into low scores for an insurer—and customers can trade plans like never before. 

Oh, and the toddler with the neck mass? The scans showed nothing malignant, so the scary part is over. The confusing part has barely begun.