ACA exchanges still dominated by narrow network plans

Document titled, Affordable Care Act
HMOs and exclusive provider organizations make up 72% of the ACA market. (Getty/Designer491)

Narrow networks have gained popularity among insurers over the last several years, and 2019 is no different.

Nearly three-quarters of exchange plans have narrow networks, according to a new analysis published by Avalere.

Similar to last year, health maintenance organizations (HMOs) and exclusive provider organizations (EPOs) continue to make up 72% of the ACA market, the report states. That’s up from 60% three years ago. The remaining plans that offer broader networks are preferred provider organizations and point-of-service plans.

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Much of the growth has come from EPOs, an approach that is favored by insurance startups like Oscar Health, Devoted Health and Bright Health, which create hypernarrow networks with what they deem to be high-quality providers. Nearly 20% of plans have EPOs compared to 11% in 2016.

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“Provider networks are getting narrower, which means it is more important than ever that patients understand what kind of plans they are buying,” Chris Sloan, director at Avalere, said in a statement. “Unknowingly enrolling in a narrow network plan could lead to patients being unable to see their preferred doctor or go to their most convenient hospital.”

Narrow networks can lower premiums but require more legwork on the part of consumers to ensure that their care needs fit within the plan’s design, added Elizabeth Carpenter, senior vice president at Avalere.

One potential side effect is out-of-network or surprise bills. A report released earlier this year by Avalere found that those with exchange coverage were more likely to receive surprise bills, particularly when seeking emergency care.

Insurers have been hit with fines for not meeting network adequacy requirements. In October, Humana was hit with a $700,000 fine by the Texas Department of Insurance for network adequacy deficiencies around anesthesiology services. Meanwhile, Centene was slapped with a lawsuit earlier this year claiming its Ambetter ACA plans misled enrollees.