The New Hampshire Union Leader exaggerated reports concerning the narrow insurance networks soon to be available on the state's health care exchange as part of the Affordable Care Act (ACA) by claiming residents of New Hampshire will have their "health care choices constrained by Obamacare." In fact, narrow insurance networks are not a new concept and allow insurance companies to create plans that are more affordable and accessible to low-income citizens.
Union Leader: Access To Health Care Will Be "Constrained By Obamacare"
Union Leader Claims Insurers Under Obamacare Will Limit Health Care Access For All. A September 23 Union Leader editorial pointed to limited insurance networks, or narrow networks, created to cover the uninsured as a failure of the ACA:
It turns out that New Hampshire is not alone in having health care choices constrained by Obamacare. The New York Times reported on Sunday that insurers in many states are shrinking their provider networks because of the Affordable Care Act.
"Federal officials often say that health insurance will cost consumers less than expected under President Obama's health care law," the Times reported. "But they rarely mention one big reason: many insurers are significantly limiting the choices of doctors and hospitals available to consumers." [New Hampshire Union Leader, 9/23/13]
Narrow Networks Provide Health Care Coverage While Keeping Costs Low
NYT: Narrow Networks Hold Down Costs For "Low- And Moderate-Income People." According to a September 22 New York Times article, narrow networks make health insurance affordable to the uninsured by reducing costs due to streamlined provider networks:
When insurance marketplaces open on Oct. 1, most of those shopping for coverage will be low- and moderate-income people for whom price is paramount. To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers. [The New York Times, 9/22/13]
BDC Advisors: New Narrow Networks Have An Emphasis On Quality And Cost Savings. According to BDC Advisors, a strategy consulting firm, new narrow insurance networks are focused on providing quality care and cost savings:
A recent BDC survey of national and regional Health Plans indicates there is a resurgence of narrow, tailored, tiered and high performance networks products in the market with premiums substantially below traditional open access offerings and with a new focus on quality. These new benefits plans are now being embraced by the market after falling into disfavor over the past decade for allegedly sacrificing quality for cost, as benefits managers opted for full service HMOs and open access PPO alternatives. Now with employers and patients seeking greater value for their health care dollars, businesses are showing a new willingness to offer narrow network products which encourage members to use more efficient health care alternatives, either by restricting networks to the most efficient providers and/or by having different copays and coinsurance for providers in different tiers of the network. [BDC Advisors, accessed 9/24/13]
Narrow Networks Are Currently Used In Employer-Based Health Insurance Programs
EBRI: Employee Benefits Have Generally Relied On Restricted Networks. According to a 2009 Employee Benefit Research Institute (EBRI) study, many Americans who receive employee health benefits coverage are already enrolled in a type of narrow network:
In 2008, 98 percent of Americans with employment-based health benefits were enrolled in some kind of managed care plan (Claxton et al., 2008). Health maintenance organizations (HMOs) and preferred provider organizations (PPOs) represent a great majority of that enrollment, with approximately 80 percent. A managed care system typically provides, arranges for, and finances medical services using provider payment methods that encourage cost containment by contracting with select networks of providers.
Before the spread of managed care in the 1990s, insurance coverage was mostly based on a fee-for-service (FFS) system. Beneficiaries in the plan picked their doctors and hospitals at will. Payment was made by the beneficiary when service was rendered, or the health care provider accepted assignment of the claim from the beneficiary, and afterward claim forms were submitted to the insurance company (or self-insured plan sponsor) for reimbursement. Under managed care, enrollees are often required to follow utilization review and disease management procedures in order to secure coverage for services received. [Employee Benefit Research Institute, accessed 9/24/13]
Previous Use Of Narrow Networks Have Been Successful
Reduced Cost Narrow Networks In Massachusetts Have Been "Popular With Certain Individuals And Employers." According to California Healthline, Massachusetts has offered popular narrow networks at lower cost since the state's healthcare reform of 2006:
Evidence from Massachusetts -- which instituted its own health insurance mandate and exchange half-a-dozen years ago -- suggests that the model can succeed "when plans contract with providers that are pursuing a low-cost strategy, rather than with those that are simply granting temporary discounts to pick up volume," David E. Williams, president of the Health Business Group, told California Healthline.
For example, Williams cites Fallon Community Health Plan in Massachusetts, which "partners with Steward Health Care System to offer a narrow network product for about 20% less than comparable plans with broader networks." The plan has been popular with certain individuals and employers who are purchasing coverage through the state's Health Connector and can see side-by-side pricing, Williams adds. [California Healthline, 5/29/13]
Massachusetts, Which Uses Narrow Networks, Matches National Average In Health Access And Availability Of Care. According to the Massachusetts Center for Health Information and Analysis, the state's health plan performance --which includes narrow networks-- matches the national average of health care access:
Massachusetts health plan performance was in line with the national average. There was also little variation across plans on two HEDIS measures used to evaluate adults' and childrens' access to primary care practitioners and preventive care, a key indicator of health care access. The measures evaluate the proportion of enrollees that had the recommended preventive care visits; higher rates indicate greater access to preventive care.
For adults, the Massachusetts average score (96%) was in line with the national average (95%) (Figure 14). Among the health plans examined, there was little variation; performance ranged from 94% (Neighborhood Health Plan (NHP)) to 97% (HPHC PPO). On the children's access measure, the average scores were between 97% and 99%. For the seven payers analyzed, scores exceeded national averages and, in all age ranges for children, every product scored above 95% on these measures. [Massachusetts Center for Health Information and Analysis, August 2013]
Narrow Networks Will Apply To Previously Uninsured And Those Who Switch Insurance
Anthem Insurance Company: Individual Policies Purchased Before March 23, 2010, Will Not Be Subject To New Narrow Networks. According to a Seacoast Online interview with Anthem, the only health insurer to offer plans on the New Hampshire exchange under the ACA, those who purchased plans prior to March 23, 2010, will not be subject to narrow plans:
Q. Will people who purchased individual policies before March 23, 2010, that were "grandfathered in," be able to stay with their same policy when it's up for renewal or will they have to purchase the newer narrow product that excludes certain hospitals?
[A.] Members who have grandfathered health plans will be able to stay on their grandfathered health plan. They will not have to move to an ACA compliant plan with the accompanying Pathway network at renewal unless they decide to choose a new plan. [Seacoast Online, 9/15/13]
Las Vegas Review-Journal: Narrow Networks On The Exchanges Apply To Newly Insured Or Those Who Switch Coverage. According to the Las Vegas Review-Journal, narrow networks will appear on exchanges used by people seeking new insurance coverage:
Whether you'll see a trimmed-down network in 2014 depends on your current coverage. If you have a policy through a big company or a self-insured business, and you don't change plans Jan. 1, your network should stay the same. If you have to change plans, or if you're buying for the first time, you could see thin networks. [Las Vegas Review-Journal, 9/11/13]
Associated Press: New Hampshire Narrow Networks Will Include 74 Percent Of Primary Care Providers, 85 Percent of Specialists. According to a September 18 Associated Press article appearing in the Boston Globe, 74 percent of primary care providers and 85 percent of specialists will be included in the Anthem Blue Cross and Blue Shield of New Hampshire narrow network:
The new network will include 74 percent of the state's primary care providers, 85 percent of specialists and 16 of the state's 26 acute-care hospitals. And while concerns about access to care are magnified by the fact that no other company will be offering plans, Anthem can neither change nor fully correct for that, Anthem president Lisa Guertin told state senators Wednesday. [Boston Globe, 9/18/13]