Narrow networks are going to become more common and perhaps even narrower.
Patients and consumer advocates have been raising alarms since the implementation of the Affordable Care Act about the limited number of providers included in many ACA plans, but insurers say that that’s the only way they can turn a profit.
A report of ACA marketplaces in 18 states and the District of Columbia by McKinsey, the consulting giant, found that three-quarters of the plans available will be health maintenance organizations or other types of plans that strictly limit which hospitals and clinics a beneficiary can access in the area.
That’s a major increase from this year, when 64 percent of plans included narrow networks. In 2015, only 55 percent of plans were.
Insurers appear to be responding to consumer demand with their offerings. All evidence suggests that low premiums are the chief priority of most ACA customers.
A federal analysis found that roughly half of those who purchased plans on the marketplace in 2015 chose the absolute cheapest one available and in 2014 two-thirds of customers purchased either the cheapest or second-cheapest plan.
It’s not just because consumers can’t tell the difference between plans and are defaulting for the cheapest option. A recent survey of ACA customers found that over half identified low premiums as their top priority, with only 12 percent saying that access to certain providers was the most important part.
The increased role of narrow networks is partly driven by the fact that some insurers that offered more comprehensive, expensive plans are exiting the marketplace. UnitedHealth, the largest insurer in the country, substantially reduced its presence in the marketplace after reporting major losses, but experts noted that their plans tended to be more costly and far less popular.
But even the insurers that are remaining are shifting away from broad networks in an attempt to keep costs down and attract more customers. Narrow networks should be particularly attractive to the young and healthy, who do not expect to rely on major medical services in the near-term and are more likely to go for the cheapest plan available. These are the types of customers every ACA plan is yearning for.