75% of Exchange Plans in California Use Narrow Networks

A new study finds that 75% of California’s Obamacare health plans have narrow physician networks — more limited choices than all but three other states.

The latest report examines health plans sold to consumers last year under the Affordable Care Act and shows wide variation in the prevalence of narrow networks across the country.

Only Georgia, Florida and Oklahoma had a higher percentage of small provider networks than California did in the insurance company directories analyzed by University of Pennsylvania researchers.
Nationwide, 41% of networks were labeled narrow, meaning they included 25% or less of the physicians in a rating area.

Twelve states had no narrow network plans in their individual market, including Oregon, Connecticut and Missouri. The researchers studied more than 1,000 Silver plans sold in exchanges nationwide.

To hold down premiums under the health law, big insurers such as Anthem Inc. and Blue Shield of California cut the number of doctors and hospitals available to patients.

Dan Polsky, executive director of the Leonard Davis Institute of Health Economics at Penn and the lead researcher, said narrow networks can be an effective way to control medical costs.

But he said consumers still don’t have an easy way to tell whether a health plan is narrow or not before enrolling.

Consumers often have the ability to search for specific doctors before picking out a policy. But that information doesn’t tell a consumer how restricted an overall network may be for primary-care doctors or specialists.

Polsky recommends a labeling system akin to T-shirt sizes, going from extra small to extra large. Extra small and small are narrow networks under the researchers’ 25% definition.

“We need a good way to communicate this information to consumers so they can make an informed decision at the point of purchase for a health plan,” Polsky said. “Narrow networks in my opinion aren’t necessarily bad things, but they are being poorly implemented.”

State and federal regulators have been grappling with how to respond to consumer complaints about skinnier networks and inaccurate information in provider directories.

Polsky said it took considerable time and effort to clean up insurance company provider lists before this analysis could be done.

The researchers said better data on exchange networks is essential so regulators can ensure patients have sufficient access to doctors and consumers can determine whether a lower-priced narrow network policy is a good deal.

“Network composition is a major way in which insurance companies can attempt to control costs in the marketplace, and for consumers there is often a tradeoff between access and price,” said Kathy Hempstead, director of health coverage issues at the Robert Wood Johnson Foundation, which published the report Monday.

The health researchers also mapped how narrow networks vary within states with the prevalence far higher, for instance, in several areas of Southern California.

It also differs by plan type. More than 90% of California’s HMO networks for individual coverage were narrow, compared to a third of PPO plans in the state.

Covered California, the state’s insurance marketplace, and its participating health plans have said networks have been expanding since the initial rollout in January 2014 to ensure patients’ needs are met.

In a recent Kaiser Family Foundation survey, 91% of exchange customers said it was easy to get to their usual source of medical care, matching the response among people with other types of private coverage.

But 18% of exchange policyholders surveyed said a medical provider would not accept them as a new patient.

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