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State exchange products lean toward limited networks
To ensure consumers logging onto the marketplace exchanges see their most affordable offerings, many payers have narrowed their networks to exclude providers who don’t meet cost and quality standards.
The tactic, which can allow more pricing and quality control to insurers, is not new. Narrower networks were a key piece of the HMO models of the 1980s and 1990s. While the need to control healthcare costs may make consumers more accepting of narrower networks now, two new factors could hinder their acceptance: the increased scrutiny of healthcare reform and the ability to easily compare insurance offerings.
While healthcare reform is making more headlines than ever, not all of them revolve around lower costs and higher quality healthcare. HealthPocket, a website that compares and ranks health insurance plans, recently outlined how narrower networks could hurt some consumers and turn off providers (“Narrow Networks Hinder Insurance Shoppers & Healthcare Providers”).
A number of such sites and services have recently emerged to serve up newly available government healthcare and exchange data to consumers.
“In a state like mine, New Hampshire, only Anthem Blue Cross Blue Shield is on the state exchange,” says HealthPocket’s head of research and data, Kev Coleman. “One third of the providers in the state are not in Anthem’s network.”
He says there are similar instances in Missouri and Washington where high-profile academic or children’s hospitals are not available in network via the exchange marketplace.
While insurers may want consumers to question their out-of-network healthcare providers’ cost and quality records, Coleman says consumers need to be aware that they will face out-of-pocket costs for using doctors who are not in an insurer’s network. And consumers that they could face longer wait times when using in-network providers because more members are being directed there.
“Providers within the network will receive more new enrollees, but that means they have to work more efficiently,” he says. “Consumers need to make sure they don’t get longer wait times.”
While Coleman knows of no data yet available to show that narrower networks lead to longer wait times, a recent study from Avalere Health does show that the majority of states have four or more insurers offering plans in their respective exchange marketplace.
Avalere also says it examined the premiums of health plan offerings in the individual market in the top 13 federally facilitated marketplace states by expected exchange enrollment. It then looked at plan offerings in the largest city in each of those 13 states.
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While Avalere’s data would indicate that insurers are offering competitive pricing via the marketplaces, it does not address the steps they may have taken to be able to lower premium price points, such as narrowing networks. Coleman says consumers need to be educated on why certain providers are excluded from networks, and what that means to them.
“One of the key issues is giving as much transparency as possible regarding provider quality ratings,” says Coleman. “At end of the day, for someone who is young and healthy who uses healthcare infrequently, they may not care. But if someone has a chronic condition, they may be concerned [about a narrower network of providers.]”
With the spotlight on healthcare choices, Coleman’s advice to insurers is to be proactive in providing information to consumers.
“Consumers won’t be able to make an informed choice unless they have that data,” he says.