Many people are surprised to learn that, under their new network plan, they can no longer see their usual physician without bearing out-of-network costs.
Many health plans being offered on the new health insurance exchanges created by the Affordable Care Act limit coverage to a narrow network of providers and hospitals. By limiting enrollees' choice of providers, insurers hope to contain costs and keep their premiums competitive.
The health reform law mandates that such networks provide adequate access to needed care, but many people are surprised to learn that they can no longer see their usual physician or go to the hospital where they used to go without “going out of network” and paying substantially more.
"I think we will have to wait several years before we can assess the impact narrow network policies have had," Aaron Katz said.
picture of Aaron Katz, senior lecturer with UW's School of Public Health
The strategy has been credited with helping to keep premiums low, but when networks were introduced in the 1980s and 1990s, both patients and providers rebelled. Aaron Katz, a principal lecturer in the University of Washington's School of Public Health and an expert on health systems and policy, says the jury is still out. He took part in a Q&A for HSNewsBeat.
Q. How are narrow networks supposed to work?
A. In theory, insurers create a network of providers based on quality and cost. Their stated goal is to create a network of providers who provide good quality care, maybe the best quality care, at the lowest cost; those are the providers they want their enrollees to go to. In some models, enrollees can only go to network providers. Others may be tiered models in which, if you go to network’s preferred providers, the top tier, the insurer may cover all your costs or at least require a lower copayment. If you go to a second-tier provider, you pay more, third-tier, still more and so on.
It’s clear that across the country and certainly in Washington state’s insurance marketplace, insurers have incorporated narrow networks in most of their exchange products, so I think we can infer that insurers see narrow networks as a way to hold down their expenditures. Whether networks are holding down costs remains to be seen. There are a lot of factors that affect premium prices, the risk pool, the people who are enrolling in these plans, may be healthier than was anticipated, for example. Competition between insurers set up by the exchanges may also be holding down prices. I think we will have to wait several years before we can assess the impact narrow network policies have had.
Q. Are consumers likely to accept such limits on whom they can go see?
A. Narrow networks have been around for a long time, but when they were introduced in the late 1980s and early 1990s, patients and providers rebelled. Patients did not like being told they could not see certain doctors, and providers felt the criteria used to measure their quality of care were unfair. So there was a lot of pushback.
Today, your attitude toward networks likely depends on who you are and where you are starting from. If you are somebody who has had insurance and a longstanding relationship with a physician and you end up in a plan that doesn’t allow you to see your regular doctor, it can be traumatic. On the other hand, if you haven’t had insurance before, or for a long time, and haven’t had a regular doctor, it may be as simple as looking at the list of network providers and picking a doctor. Networks can be particularly controversial if they are seen as limiting access to necessary care. For example, Seattle Children’s has been excluded from many of the exchange’s network plans. Children’s claims its exclusion from these plans denies patients access to its unique services. I don’t know whether this is so, but the worst-case scenario would if someone was harmed because they couldn’t get needed specialty care because its providers were not in their network.
Q. In order to be included in a network, providers often must must not only agree to meet certain quality standards but also to accept lower payment rates. How far can insurers go before providers start to refuse to participate?
A. Most narrow network plans are on the exchanges, where currently only a fairly small proportion of people get their coverage. Most people still get their coverage through their employer. So, for now, most providers can still decide whether they can get by without network patients.
But if insurers decide this model is successful, they may start applying it to more and more enrollees. Then we may see doctors and hospitals begin pushing back, as they successfully did 20 years ago. Whether they will be successful again is a question. We may be in a different environment now. There is a great deal more pressure on cost control, outcomes and transparency.
Look at the Everett Clinic’s recent decision to publish its prices. That’s something providers have long resisted. It’s possible that the Affordable Care Act may have created enough momentum for change that providers will have to accept narrow networks. Healthcare providers maybe deciding that the train is leaving the station and they better get on board rather than try to derail it. It will be very interesting to see whether narrow networks will be sustained. One thing I’ve learned studying and following our health system over the years is it’s best not to extrapolate too far out from one or two data points. The system is very large, very complex and very fluid. Just because narrow networks are the rage right now, doesn’t mean they are going to be the rage in five years.