Narrow network plans, which some say are akin to the failed HMO experiment of the 1990s, are making a comeback. As insurers prepare to sell plans through health insurance exchanges, they're hoping these limited networks will appeal to a large number of new consumers.
Insurers are betting that limiting their network will help them provide health plans with more efficient providers and thereby cut costs while improving care, Kaiser Health News reported.
And since many consumers shopping for health insurance through online marketplaces this October will be young and healthy, insurers expect they'll be more likely to welcome the lower cost, narrow network plans.
Some industry experts agree. "I think we're going to see that the consumers coming into this [exchange] market are much more cost conscious, " Bill Fera, principal with Ernst & Young, previously told FierceHealthPayer. "And I think they'll be willing to make the tradeoff of a lower price point for a narrower network."
An added benefit for insurers is that consumers with pre-existing conditions or medical problems probably won't be interested in narrow networks. So insurers can avoid covering these high-cost consumers, who can't be denied enrollment under the reform law.
Some insurers already have rolled out narrow network plans ahead of the exchange enrollments. For example, Massachusetts insurer Harvard Pilgrim's narrow network plan excludes some of the state's most expensive systems like Massachusetts General Hospital, Brigham and Women's Hospital and Partners Healthcare-owned hospitals. Blue Shield of California, meanwhile, offers SaveNet HMO plans with networks about half the size of its standard plans' networks.
But insurers also must be wary of state regulators who may call them out for placing too many restrictions in a plan. "The question will be what degree of tolerance will a state have to permit narrow networks?" Chet Burrell, CEO of CareFirst Blue Cross Blue Shield, told KHN.
To learn more:
- read the Kaiser Health News article