Understand the tradeoffs of a “narrow network” health insurance plan

In an effort to offer more affordable health plans, insurers have rolled out “narrow network” plans that may significantly restrict the choices of doctors and hospitals covered by the insurance and that limit out-of-network options. The result can be confusing for consumers who may be unaware of what they are buying and may have to change physicians or experience “surprise medical bills” for getting care out-of-network. These surprises are often intensified because insurers don’t maintain accurate directories of the providers covered by the plans. According to the Kaiser Family Foundation in 2018 73 percent of plans offered through the ACA exchanges were more restrictive HMOs or EPOs, up from 54 percent in 2015. Regulators are now stepping in: Mike Kreidler, Washington state’s insurance commissioner, fined one insurer  $1.5 million for failing to maintain an adequate network of doctors. But as noted healthcare economist Paul Ginsburg explains, “Narrow networks are a trade-off. They can be successful when done well. At a time when we need to find ways to control rising health care costs, narrow networks are one legitimate strategy.” When executed correctly, a narrow network is just the “right” network, carefully curated to deliver the best care at the most affordable price. But insurers seem incapable of using clinical evidence to select the right providers, or of using technology to surface in real-time who is in or out of network, leaving the consumer lost, and practically requiring regulators to intervene. The result is conflicted double talk defending open choice while lamenting rising costs. Here we have experience both clinically and with insurers and regulators and consumers: transparency of network through the use of simple technology revealing a carefully curated set of physicians, practices and hospitals can deliver great care, great experience and affordable prices. But regulators don’t support experimentation or novelty in this market. Until they do, the ultimate trend will likely be continued rising costs and generic experiences in the commercial market.

Read: Kaiser Health News: In Search Of Insurance Savings, Consumers Can Get Unwittingly Wedged Into Narrow-Network Plans

Recent Posts

See All

Hi from HIMSS19!

By Albert DiPiero MD MPH I am at the annual HIMSS meeting in Orlando Florida this week. HIMSS is the Healthcare Information and Management Systems Society. A few quick thoughts: The sheer volume of he

CVS explores new concepts in healthcare

By Albert DiPiero MD MPH CVS - the drug store chain which is also one of America's largest retailers - is not waiting to see what Amazon is up to. CVS is pushing ahead transforming itself from retail

Amazon health venture hires CTO

By Albert DiPiero MD MPH The joint healthcare venture between Amazon-Berkshire Hathaway-JP Morgan Chase (ABJ) just announced the hiring of Serkan Kutan as its CTO. Mr Kutan was most recently chief tec