Insurers are facing pressure from regulators and lawmakers about plans that offer limited choices of doctors and hospitals, a tactic the industry said is vital to keep down coverage prices in the new health law’s marketplaces.
This week, federal regulators proposed a tougher review process for the doctors and hospitals in plans to be sold next year through HealthCare.gov, a shift that could force insurers to expand those networks.
Meantime, regulators in states including Washington and New Hampshire are ramping up their own scrutiny, and lawmakers in Mississippi and Pennsylvania, among others, are weighing bills that could force plans to add more hospitals and doctors.
The moves come amid complaints by some consumers that they don’t have access to a broad enough range of care—such as specialists at top academic medical centers, which tend to charge insurers higher fees and aren’t included in many of the new networks.
I really don’t understand why this is so hard to understand. Some doctors and hospitals are more expensive than others. Often, the expensive doctors and hospitals are at top academic medical centers. If insurers let their beneficiaries go to these hospitals, then it will cost insurers more. To compensate for this, they have to charge higher premiums to their beneficiaries. Then, insurance customers might balk and go shop elsewhere.
One option is to make deals with cheaper hospitals and doctors and send your insurance beneficiaries there. Then the spending is less and the premiums are less. This is one of the tools available to private insurers to reduce costs and premiums. These are called “networks”.
Now I understand concern if there are no plans on the exchange that allow people to go to the doctor they want. In that case, it seems reasonable that some plan should offer more choice. But expect that plan to be much more expensive.
Personally, I like going to the doctors I want. That’s why I’ve always been willing to spend more if that’s what it took. Some of my friends just want to save money, and are willing to take a plan with fewer options that costs less. That’s how it works.
My concern is that people don’t understand the trade-offs. Narrow networks are an attempt to keep spending and premium cost down. You can’t have your cake and eat it, too.