If the physician networks for plans sold on the health law’s online insurance exchanges were T-shirts, more than 40 percent would be size X-small or small. That’s the takeaway from a new study that analyzed nearly 400 physician networks in silver-level plans sold around the country in 2014.
The study labeled 11 percent of plans “extra small” because they covered fewer than 10 percent of physicians in a plan’s region. Another 30 percent were “small,” meaning they covered between 10 and 25 percent of physicians. Just 11 percent of plans were classified as “extra large” because they covered at least 60 percent of physicians in the area.
As consumers shop for coverage on the exchanges, knowing the trade-off between premium price and network size could be important to some, says Kathy Hempstead, director of the coverage team at the Robert Wood Johnson Foundation, which funded the study.
“People don’t have a good way to understand what they’re buying,” Hempstead says. “I think we need to frontload more consumer information, and what your network is like is important.”
Plan type isn’t a good indicator of network size, according to the study by researchers at the University of Pennsylvania’s Leonard David Institute of Health Economics. Eighty percent of the plans offered on the marketplaces were either preferred provider organizations or health maintenance organizations. Yet even though HMOs typically don’t cover any out-of-network providers, more than half of HMO physician networks were either small or very small. By contrast, only a quarter of PPOs, which typically cover providers who are outside the plan’s network, had physician networks that were classified as either small or very small.
Under the health law, health plans have to “maintain a network that is sufficient in number and types of providers … to assure that all services will be accessible to enrollees without unreasonable delay.”
Previously, the consulting firm McKinsey & Co. analyzed narrow networks based on the proportion of hospitals that participated in a plan’s service area. This is the first study to examine physician participation in exchange plan networks, Hempstead says.
“If you’re going to be in a direct-to-consumer market you have to be ready for these issues,” she says.