Exchange Provider Networks May be Too Narrow

Limited provider network options in the healthcare insurance exchange are causing concern that is not unlike the backlash managed care organizations received in the 1990s. Limited networks not only provide payers a way to control costs, but they are appealing for those uninsured who previously had no provider options. Nonetheless, many remain unconvinced that this option is appropriate for consumer needs.

“We had narrow networks in the ‘90s. Health-care prices not only moderated, but actually there was one year where they fell,” David Dranove, a professor at Northwestern University, said in a recent article. “Then we had the HMO backlash and we had broad networks [again], and healthcare prices went through the roof.”

States are addressing the narrow network issue in a variety of ways. Maine state legislators recently prohibited Anthem BlueCross BlueShield from switching some of its customers to an exchange network that excluded 6 of the state’s hospitals. Washington State banned health plans that didn’t meet adequate network standards, while New Hampshire’s Anthem network will exclude one-third of state hospitals. Many other states are considering laws that would force insurers to accept more providers into their networks.

Insurers like Anthem are likely to argue that savings are found in narrow networks, but New Hampshire State Representative Bill Nelson is not swayed. “Sure that could happen for some people, but other people are going to be losers. Imagine having to change the doctor you’ve had for years,” said Mr Nelson.

Narrower networks can also be problematic for those with serious conditions.

“Whenever you have an extremely narrow network there are potential problems for patients with cancer and for patients with any chronic condition, particularly when it requires the patient to go out of network,” said Kirsten Sloan, senior director of policy for the American Cancer Society Cancer Action Network.

Around the Web

‘Narrow Networks’ Trigger Push-Back From State Officials [Kaiser Health News]