Study: 75% of California Exchange Plans Have Narrow Networks

California has the fourth-highest rate of narrow networks among all states, according to a new study, the Los Angeles Times reports.

Details of Study

For the study, released by the Robert Wood Johnson Foundation, University of Pennsylvania researchers analyzed more than 1,000 silver plans sold last year via the Affordable Care Act's exchanges.

The study deemed 41% of networks nationwide to be narrow -- defined as covering 25% or fewer physicians in a given area (Terhune, Los Angeles Times, 8/25).

National Findings

The states with the highest percentage of small provider networks were:

• Georgia, with 83% of exchange health plans;
• Florida, with 79%; and
• Oklahoma, with 78%.

States with generally large networks were Delaware, Kansas and North Dakota.

California Findings

In California, researchers examined 16 networks offered by 11 insurers selling plans through the state's exchange.

The study found that about 75% of the networks were considered narrow. Specifically:

• 38% were considered "x-small," meaning they included 10% or less of providers in the rating area;
• 38% were considered "small," meaning they included 10% to 25% or less of providers in the rating area;
• 19% were considered "medium," meaning they included 25% to 40% of providers in the rating area; and
• 6% were considered "large," meaning they included 40% to 60% of providers in the rating area.

No provider networks offered through the California exchange were considered by researchers to be "x-large," meaning they included 60% or more of providers in the rating area.

The size of provider networks differed by health plan type. For example, 91% of HMO networks in California were narrow, compared with 33% of PPO networks (Polsky/Weiner, RWJF study, August 2015).

Recommendations

Dan Polsky -- lead researcher and executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania -- said that consumers do not have a clear method for determining whether a network is narrow before enrolling in a plan. Polsky recommended a labeling system for health plans similar to that for T-shirt sizes, from "x-small" to "x-large."

He said, "We need a good way to communicate this information to consumers so they can make an informed decision at the point of purchase for a health plan," adding, "Narrow networks in my opinion aren't necessarily bad things, but they are being poorly implemented."

The researchers also said better exchange network data are needed so that:

• Consumers can determine whether lower-priced, narrow network policies are a good deal for them; and
• Regulators can ensure sufficient access to providers.

Kathy Hempstead, director of health coverage issues at RWJF, said, "Network composition is a major way in which insurance companies can attempt to control costs in the marketplace, and for consumers there is often a tradeoff between access and price" (Los Angeles Times, 8/25).