Narrow networks don't always mean lower premiums


Insurers have turned to narrow networks as they compete for customers in the marketplaces created through the Affordable Care Act (ACA), but it's difficult for consumers to discern whether a plan's network will meet their needs, according to a report from the Urban Institute.

The report looked at the networks offered in six cities: Denver; Baltimore; New York City; Portland, Oregon; Providence, Rhode Island; and Richmond, Virginia.

In limited networks, insurers can negotiate lower provider payment rates by directing volume to those facilities. It found that while narrow networks tend to lead to more competitive, lower-cost premiums, some plans with broader networks had low premiums and some plans with narrow networks had high premiums.

In addition, academic medical centers (AMCs) were not necessarily included. While nearly all products offered in Manhattan, Baltimore, Richmond and Providence included them, only about half did in Denver and Portland. Though Portland had only a single AMC, not all insurers included it. Meanwhile, plans covering Manhattan, rich with AMCs, included at least two.

The study also found a slight correlation between HMO and EPO products and more restrictive networks.

The authors, however, were concerned that consumers would have to leave the marketplace website to go to the insurer's website to determine whether a particular facility was included in a plan's network, concluding that many consumers are likely unaware of what they're getting.

"Consumers who know what hospital they want included in their network may be able to select an appropriate plan, but it would be difficult to otherwise compare plans by the breadth of hospital networks."

Narrow networks have led to concerns about limited consumer choice and treatment interruptions. Narrow networks must achieve a balance of value, access and affordability, an industry panel stressed during a July briefing from the nonpartisan Alliance for Health Reform.

Meanwhile, California's Anthem Blue Cross faces a class-action lawsuit that alleges it delayed giving consumers full information about whether their physicians and hospitals were in-network until it was too late for patients to switch coverage

To learn more:
- read the report

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