Fewer Choices Equals Lower Premiums For Exchange Health Plans
They say you pay for what you get, and that axiom apparently applies to individual health plans sold over state and federal health insurance exchanges.
A new study in the health policy journal Health Affairs says consumers can save as much as 13 percent on their monthly premiums if they enroll in exchange health plans that severely limit the number of physicians available to them for care.
Health services researchers from the University of Pennsylvania analyzed monthly premiums for 1,075 silver-level health plans sold on state and federal health insurance exchanges in 2014 by 192 different insurance carriers in 476 markets across the country. The average monthly premium was $266.
The researchers then compared monthly premiums offered by the same plans based on the size of the physician network available to each plan’s enrollees. They separated the physician networks into five size categories: extra-small, which included less than 10 percent of the available doctors in the market; small, which included 10 percent to 24 percent of the available doctors in the market; medium, which includes 25 percent to 39 percent of the available doctors in the market; large, which includes 40 percent to 59 percent of the available doctors in the market; and extra-large, which includes 60 percent or more of the available doctors in the market.
They found that the average monthly premiums for health plans with extra-large physician networks were 13 percent higher than the average monthly premiums for health plans with extra-small physician networks. Premiums for health plans with large physician networks were 6.7 percent higher than the premiums for plans with extra-small physician networks.
“If narrow networks are to succeed as a strategy of offering products for price-sensitive consumers, it will be critical to improve transparency and address the hidden consequences for consumers who select narrow-network plans,” the researchers concluded.