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More consumers enrolling in narrow network health insurance plans

"There's no question" members are willing to trade choice and access for price, says Mark Newton, CEO of Chicago-based Swedish Covenant Hospital

As more insurers offer plans with narrow networks, consumers are increasingly willing to give up a broader selection of providers to save money on their healthcare costs.

This year, almost 50 percent of all plans offered on health insurance exchanges have narrow networks, and almost 20 percent are considered "ultra-narrow networks," which give consumers even fewer doctor and hospital choices. Meanwhile, more employers are choosing narrow network plans, according to a report from the McKinsey Center for U.S. Health System Reform.

Despite the prevalence of narrow networks today, insurers were initially leery of consumer backlash. "There was a lot of trepidation right around the launch of the public exchanges and the narrow networks," Colin Drozdowski, an executive with Anthem, told the New York Times.

Anthem was one insurer that came under fire last year for allegedly misleading consumers about its networks and making it too difficult for members to find treatment. There was also widespread criticism and actions taken to block narrow networks last year, including a lawsuit against Cigna and Blue Shield of California, FierceHealthPayer previously reported.

But much of the initial concern appears to have waned. "The noise and clamor from the regulators, from employers and employees, has lessened significantly," Drozdowski said. In fact, McKinsey found that only 17 percent of consumers switched from a narrow network plan to one with a broader network.

Meanwhile, some insurers are getting creative with their narrow network plans. For example, Land of Lincoln Health, a consumer oriented and operated plan, partnered with just eight providers to offer new narrow network plans this year. Because of its small size, the insurer lowered its prices by 20 percent from its plans last year, which helped boost enrollment from 3,800 to more than 50,000 consumers.

"Are [consumers] willing to trade choice and access for price? There's no question about that," Mark Newton, CEO of Chicago-based Swedish Covenant Hospital, which is one of Land of Lincoln Health's providers, told the Times.

To learn more:
- here's the McKinsey report
- read the New York Times article

Related Articles:
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Proposal in California would require insurers to update provider lists
Narrow networks don't always mean lower premiums