Health plans offered through Covered California have narrower hospital networks than commercial insurance plans but they don’t appear to have lower-quality providers or differences in geographic access, according to a study published in the May issue of Health Affairs.
Health plans with narrow networks restrict the number and scope of contracting physicians and hospitals to keep premiums low. Narrow networks are not new, but they have proliferated under the Affordable Care Act as health plans participating in the state and federal exchanges balance cost with access.
The Health Affairs study analyzed hospital networks available to Californians through private commercial coverage and through Covered California during the initial enrollment period of 2013 to 2014. For comparison, the researchers chose four insurers in each region of the state that offered plans in both the commercial market and through Covered California. These were: Anthem, Blue Shield of California, Kaiser Permanente and Health Net. The study included 338 hospitals in 19 regions.
Overall, Covered California enrollees had about 83% of the number of hospitals in-network as those with private insurance, according to the study.
However, geographic access was about equal between plans. About 92% of Covered California consumers were within at least one hospital network, compared to 93% for private plans.
Quality of hospital services also did not suffer in exchange plans, said David Weimer, a professor with the La Follette School of Public Affairs at the University of Wisconsin–Madison, and study co-author.
“Two of the analyses show no substantive difference in the average quality of the networks, but a third measure indicates that the average quality in the exchange networks is actually higher than that in the commercial networks,” Weimer said. “Insurers may be deliberately excluding some hospitals that have not been designated as top performers.”
A state bill that aims to provide more transparency around which physicians and hospitals contract with what health plans was moved to the suspense file on Monday in the state Senate Appropriations Committee for consideration later this month.
SB 137, by Sen. Ed Hernandez (D-West Covina), would require health insurers to update weekly their directories on contracting providers, and meet or exceed a 97% accuracy rate.
California has taken other steps to improve transparency of provider networks. Under a bill signed by Gov. Jerry Brown (D) in October 2014, the California Department of Managed Health Care must review insurers’ contracts annually between insurers and providers to ensure timeliness of care. Previously, the department was required to review these reports every three years. Hernandez also authored that bill, SB 964.
In February, emergency regulations requiring health insurers to have sufficient medical providers in networks went into effect. California Insurance Commissioner Dave Jones (D) issued the regulations after receiving numerous consumer complaints about skimpy networks and unexpected bills from out-of-network providers even when an in-network provider isn’t available.
Among the rules, health plans must provide accurate directories of in-network providers and make them available to the public. Insurers are also no longer allowed to bill patients at out-of-network rates when in-network providers are unavailable.