Narrow networks trigger regulatory, legal action

State officials are fighting back against insurers offering health plans with narrow networks, in some cases taking regulatory action as well as introducing legislation and even lawsuits.

Insurers claim narrow networks help reduce costs by containing medical inflation and boosting coordination of care. Generally, providers agree to lower prices in return for more patients, and insurers pass on some of the savings to their members, reported Kaiser Health News and Politico.

Although narrow networks in the 90s helped moderate healthcare costs, their return is causing a backlash among the public and some states officials concerned they will prevent consumers, especially those with chronic illnesses, from receiving necessary care at low costs.

Those fears have driven some state regulators and officials to try to force insurers into changing their narrow network plans. Maine regulators, for example, prohibited Anthem Blue Cross Blue Shield from transferring some members into its narrow network plan sold on the exchange that excluded six of the state's hospitals.

In Washington, Insurance Commissioner Mike Kreidler banned several insurers from its exchange because of inadequate provider networks. Although he later allowed two of those banned insurers into the exchange, Seattle Children's Hospital sued Kreidler, claiming the plan will prevent some patients from receiving care at the hospital.

Meanwhile, in response to Anthem Blue Cross Blue Shield of New Hampshire's exchange plan that excludes 10 of the state's hospitals, New Hampshire lawmakers have written legislation that would force insurers to expand their networks.

Lawmakers in South Dakota, Pennsylvania and Mississippi also are considering legislation, known as "any willing provider" laws, that would force insurers to expand their networks.

But this mounting effort to limit insurers from using narrow networks will "throttle competition," David Dranove, a professor at Northwestern University who specializes in the healthcare industry, told KHN and Politico. "And this is a healthcare reform that depends entirely on competition. So the people who are fighting for broad networks ... are ultimately fighting for the demise of Obamacare."

To learn more:
- read the Kaiser Health News/Politico article

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