Narrow provider networks have become the norm in health plans purchased from state insurance exchanges under the Affordable Care Act.

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Narrow provider networks are one result of the ACA

June 2nd, 2014

NEW YORK – Narrow provider networks have become the norm in health plans purchased from state insurance exchanges under the Affordable Care Act.

Many networks now exclude at least some doctors’ groups or big hospitals. Limited networks are also increasingly showing up in employer-sponsored plans and private Medicare Advantage plans.

Insurance companies say smaller provider groups are necessary to contain costs. The public must get accustomed to less choice, they say.

But while consumers may be willing to give up some choice to keep down premiums, people remain leery of narrow networks, seeing the possibility of lack of access to specialists or certain hospitals.

Dr. Monica Wehby, the Republican Senate candidate in Oregon, is using the issue in her campaign. A pediatric neurosurgeon who advocates repeal of the ACA, she is running with the slogan “Keep your doctor. Change your senator.”

Other critics say plans fail to spell out their networks’ size. Government officials say they are more closely monitoring new plans to ensure there is no confusion about provider groups and that people have sufficient access to hospitals and doctors.

Washington state issued new rules establishing minimum standards for access to a doctor and requiring carriers to make clear who is in a network. State insurance regulator Mike Kreidler said he didn’t want to see insurers in “a race to the ­bottom.”

In New York, regulators decided against mandating out-of-network benefits in 2015, resisting pressure from patients and doctors.

New Hampshire officials are assessing the decision by the state’s sole insurer, WellPoint Inc., to exclude some hospitals.

But price is paramount for purchasers of plans on exchanges. People are considering affordability and network size, say insurers, and favoring the former. In any event, the composition of networks is expected to evolve, with treatment outcomes taking precedence over cost.

The narrowing of networks summons memories of the 1990s, when an outcry over health maintenance organizations and managed care thwarted limits on choice. But the shift is less controversial now because insurers are collaborating with providers and customers are more concerned about costs.

Premiums in plans in the second year of the ACA are being watched closely. Filings from companies in Virginia show that 2015 rates will increase more than inflation but not as sharply as some critics have forecast.

The Anthem HealthKeepers Inc. plan offered by a unit of WellPoint reported it would boost premiums in Virginia by an average of 8.5%. The plans cover some 110,000 people and are sold directly to consumers as well as on the online exchange. The company said it needed to raise rates because the poor health of many enrollees created a pent-up demand for care, and to cover ACA fees.

Other health plans in Virginia plan to increase premiums from 3.3% to nearly 15%. CareFirst BlueChoice Inc. proposed a 14.9% hike, noting that the average age of its enrollees has jumped by several years.

As of this year, insurers are required to charge the same premium to all customers regardless of their medical history and are limited in the amount they can adjust premiums by age. They also must offer a set package of benefits and cap out-of-pocket expenses.
Critics say late changes to some of the law’s provisions and the bungled launch of set the stage for escalating premiums.