Could narrow networks discourage expensive consumers from enrolling?

Insurers have clearly demonstrated their belief that narrow network plans will help them soften the impact of rising costs associated with new members under the reform law. But could the increased use of narrow networks also be a strategy to help avoid enrolling consumers with expensive, pre-existing conditions?

The reform law prohibits insurers from denying coverage to people with pre-existing conditions, but those consumers are likely to opt for plans with access to a wide selection of providers to care for their chronic conditions rather than plans with narrow networks, the New York Times reported.

"If a health plan has a narrow network that excludes many doctors, that may shoo away patients with expensive pre-existing conditions who have established relationships with doctors," Mark Rust, the chairman of the national healthcare practice at law firm Barnes & Thornburg, told the Times. "Some insurers do not want those patients who, for medical reasons, require a broad network of providers."

Insurers, however, insist that using narrow networks is simply another method to direct members to providers who are less expensive but still deliver quality care. By limiting the number of providers, insurers also say they can offer low-cost plans, which is what consumers ultimately want.

Health Care Service Corporation, for example, has created plans featuring narrow networks. "In the health insurance exchange, most individuals will be making choices based on costs," says David Sandor, a vice president with HCSC. "Our exchange products will have smaller provider networks that cost less than bigger plans with a larger selection of doctors and hospitals."

Likewise, Blue Shield of California developed a narrow network plan that omits providers like University of California and the Cedars-Sinai Medical Center near Beverly Hills--but that's not by accident. "We expect to have the broadest and deepest network of any plan in California," Juan Carlos Davila, an executive vice president of Blue Shield of California, told the Times. "But not many folks who are uninsured or near the poverty line live in wealthy communities like Beverly Hills."

These narrow network plans aren't without controversy though. In New Hampshire, state lawmakers and consumers have grilled Anthem Blue Cross Blue Shield executives for failing to include enough providers that are accessible to all consumers. And Highmark has faced strong pushback from providers accusing it of forcing patients away from their hospitals with its narrow networks.

Whether narrow networks will benefit consumers remains to be seen. "That can be positive for consumers if it holds down premiums and drives people to higher-quality providers," Adam Linker, a health policy analyst at the North Carolina Justice Center, told the Times. "But there is also a risk because, under some health plans, consumers can end up with astronomical costs if they go to providers outside the network."

To learn more:
- read the New York Times article