Narrow Networks Rule In Exchange
California may have had a wider embrace of the Affordable Care Act than many other states, but the provider options being offered to those able to purchase healthcare coverage have been quite narrow.
That's the conclusion of researchers affiliated with the University of Pennsylvania's Leonard Davis Institute of Health Economics.
According to a new report issued by the Institute, “State Variation in Narrow Networks on the ACA Marketplaces,” the bulk of health plans offered to consumers through the Covered California health insurance exchange are premised on so-called narrow provider networks. Altogether, about three-quarters of the plans sold through the exchange have narrow networks. The Institute used what it referred to as “t-shirt sizes” to gauge the size of networks in each state. The sizes represent a fraction of the number of physicians in each network compared to those practicing in the comparable geographical area, with a range of less than 10% (“x-small”) to more than 60% (“x-large”).
Its survey data concluded that 75% of the provider networks offered through Covered California participating health plans at the silver plan benefits level are either “x-small” or “small” (comprising 10% to 25% of a region's eligible providers), while just 19% are “medium” (25% to 40% of providers in a region) and 6% are “large” (40% to 60% of providers in a region). There were no networks available classified as “x-large.”
By contrast, 41% of the networks offered through the state exchanges were classified as “small” or “x-small.”
And only Florida, Georgia and Oklahoma top California in terms of having larger proportions of narrow networks offered through their state insurance exchanges. All three of those states have been cool to the ACA. None for example, have expanded Medicaid eligibility under the reform law. By contrast, California actually expanded its Medi-Cal program early under a waiver with the federal government.
Narrow networks have gained traction with health plans in recent years as a way to better control costs and keep premiums in checks. Commercial payers such as Woodland Hills-based Health Net enjoyed significant enrollment growth by using the narrow network model.
While consumers in some states have had sticker shock in terms of dramatically rising premiums through their state insurance exchanges, Covered California's average premium increase for 2016 was just 4%, compared to a 4.2% average increase for 2015. In Alabama, where no narrow networks are offered, insurers are seeking 2016 exchange rate increases ranging from just under 12% to more than 70%. In Connecticut, another state without narrow networks, the requested increases range from 16.8% to 89%.
