Exchange Marketplaces and Narrow Networks

Many states have their own exchange marketplaces, points out Arthur Vercillo, MD, FASC, regional president, Excellus Blue Cross Blue Shield. “We’ve seen an expansion of Medicaid and the individual market, and that’s really heating up,” Dr Vercillo believes, although if the system is expanded and affordable for everyone, younger, healthier individuals will have to be part of the expansion.

A concern for Ateev Mehrotra, MD, MPH, an associate professor of healthcare policy and medicine at Harvard Medical School and a hospitalist at Beth Israel Deaconess Medical Center, is the narrow provider networks that many exchange plans are utilizing. “The American public did not respond well to this the last time we tried in managed care to restrict networks,” he says. He is surprised that there hasn’t been more pushback, including negative press, this time around.

The difference, Dr Vercillo replies, is that today, consumers have more skin in the game, and the 40% required co-insurance for going out of network is an effective disincentive. They still want their doctor or their hospital, he states, but they are willing to go elsewhere if it will cost them much more. If individuals have the silver or bronze level health plans with a 30% to 40% out-of-pocket costs and high deductibles, they will move to someone else, he admits.

Dr Mehrotra thinks the situation is a bit more complicated, in that individuals signed up for these plans “because that was the one they could afford.” He believes that in the example Dr Vercillo described, the person was more informed in their choice.

In order to be on the state exchanges, plans must meet certain qualifications, including network adequacy, Dr Vercillo points out. Problems may arise, he acknowledges, when you have a higher cost physician or hospital that is no longer in the network, and patients find that if they want to return to them, they will have much higher costs.