Narrow Networks: Who’s Looking Out for Consumers?

By Max Farris and Sally McCarty

Robert Pear’s article in today’s New York Times describes what some see as a trend toward health insurers offering narrow network plans on the federal and state exchanges.  Whether consumers will have adequate networks through which they can easily access providers depends on how conscientious state regulators are about enforcing the network adequacy standards set out in the ACA’s implementing regulations.  We discuss these standards and issues surrounding their implementation by states in a brief prepared for the Robert Wood Johnson Foundation’s State Health Reform Assistance Network as well as in an earlier post.

Insurers offering narrow networks may be able to provide consumers with lower health insurance premiums, but there’s more to the concept of an adequate benefit package than merely delivering the Essential Health Benefits (EHB). It’s up to state regulators to assure that the insurers they oversee offer networks that provide reasonable access to a sufficient number of primary care and specialty care physicians, facilities, and other providers.  Further, benefits should be delivered in a timely fashion within a reasonable distance from the insured population. Networks that cannot fulfill these requirements should not be considered adequate by regulators.

While consumers, especially consumers with more modest incomes, may be willing to trade lower premiums for a narrower choice of providers, if the networks are so narrow that they force consumers to access services outside of the network, and face increased cost sharing, they are not adequate networks. Additionally, if certain secondary or tertiary providers are excluded from the network to discourage those with chronic diseases from enrolling in a plan, the plan offering the network may not only be in violation of network adequacy standards, but also of the Affordable Care Act’s prohibition against discriminatory benefit design.  State insurance regulators are responsible for assuring that these violations don’t occur and they should be vigilant about it.

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