Marketing narrow network health insurance plans

Since narrow networks are so prevalent among plans sold on health insurance exchanges, insurers should consider changing how they market these plans so that consumers better understand exactly what's covered, according to a new report from the Robert Wood Johnson Foundation.

The report found that 41 percent of silver exchange plans had small or extra-small narrow networks, which the authors defined as covering fewer than 25 percent of physicians in an area. Between HMO and PPO plans, 55 percent of HMOs have small or extra-small networks, compared to just 25 percent of PPO plans.

Previous studies have delved into narrow networks on exchange plans by analyzing hospital coverage. A report from McKinsey found that almost 50 percent of all exchange plans have narrow networks, and almost 20 percent are considered "ultra-narrow networks," for example. 

But this is the first report to consider individual doctors, as well. 

"Provider network size and composition has become an important part of how insurers price marketplace plans and attract consumers, but, so far, consumers do not have usable information about provider networks," Kathy Hempstead, who directs coverage issues at the Robert Wood Johnson Foundation, said in a statement emailed to FierceHealthPayer.

"Consumers need to be able to see the forest as well as the trees when they make a plan choice and these data are a first step in giving them the full picture of which physicians are covered under specific plans."

If insurers want these narrow network plans to succeed, the authors suggested that they improve how they market them to consumers. For example, insurers could describe narrow network plans using common T-shirt styles (extra small, small, medium and large) to help describe how many providers are included in each plan.

"Well-functioning narrow networks will survive only if they are made more transparent to consumers and are regulated properly to ensure network adequacy," the study said.

To learn more:
- here's the RWJF report