Brokers are well aware of the benefits and pitfalls of narrow networks. Recent polling by the Kaiser Family Foundation shows that consumers only seem to care about the upside to these limited plans — decreased premium prices. KFF found that only 35% of uninsured individuals and those purchasing private coverage on their own want broader networks on the public exchanges. Moreover, once the price differences of narrow plans are conveyed to those same consumers, the interest in broad networks decreases to only 22%.

Craig Hasday, chief operating officer of Frenkel Benefits LLC in New York City, says this tendency could erupt in the coming months. “They see they’re buying Blue Cross and they don’t realize they can’t go see their doctor on that plan,” he says. “And I've seen clients land on Medicaid products and they've never done it before and then — big surprise — there’s no doctors there.”

Misplaced coverage

Hasday says he got a call from one woman who was recently divorced, had substantial assets, but ended up on Medicaid. “She sounded literally desperate, and I’m a human being,” so he met with her, he says. “It took me a day to unwind the problem — and that’s without pay because brokers aren't compensated for that. I think she did end up buying something on the [public] exchange.” He says brokers may get even more consumer crises across their desks because “the consumer will get slammed” by limited plans with fewer doctor options. It’s a problem for him because he’s completely focused on his group clients but when he gets calls from people who need help, he says it’s hard to say no.

Not all public exchanges have limited networks that will put consumers up in arms, according to another broker in the South. Matt Cowan, president of Cowan Benefit Services, Inc. in Franklin, Tenn., says he’s received a few change requests from individuals who chose limited networks, but that’s been the exception rather than the rule. “There are still plenty of primary care doctors that are quality and accepting new patients,” he says, even on the most limited plan by Blue Cross that’s only available on the state public exchange. In fact, 37% of people have selected that most narrow option out of 69,000 people who were sold plans on the Tennessee marketplace, according to data released by the state as of press time. Cowan says Blue Cross has about 65% to 70% market share in the state overall.

But he’s not necessarily advocating for that plan for everyone who comes through his door. “I think taking the time to evaluate and look at the price differentials between the two or three network options and explaining the differences, once people really look at the difference people are willing to pay a little more,” he says. His rate of signing people on to the limited Blue Cross plan is far less than the overall number on the plan. “More like 10% to 15% of my clients are on the most limited plan,” he estimates.

Amy Webb, president and owner of Saratoga Benefit Services in Moorestown, N.J., isn’t so sure that even her advice as a broker will help individuals and employees understand the true implications of a limited network. She’s steered most of her individual clients clear of her federally run state exchange’s narrow option.

“There’s so many changes, people are overwhelmed,” she says. “People who never had to deal with insurance decisions because they chose to be uninsured or were previously on an employer plan now have so many choices and now with the networks, they literally shut down.”

She says brokers already have so much educating to do in initial coverage discussions with clients. “We want to keep it simple, get them into a plan and then after a year or two, we can show them the price differences and the possibility of going narrower,” she says. “It just leaves them open to much higher out-of-pocket exposures and the possibility of very narrow networks.” Out of the 25 to 30 individuals Webb’s brokerage has sold individual plans to in the last month, none have chosen the narrower network.

Overload for employees, too

Some employers agree with Webb. When asked about the value of limited networks at an America’s Health Insurance Plans conference in March, two employer representatives were hesitant. “What we’ve tried to do already has been challenging to educate the employee population [on health reform], so as other options come in to play, it’s only going to get more difficult,” said Alex Elmore, COO at Billy Casper Golf, one of the biggest domestic golf course employers.

Laurel Pickering, executive director of the Northeast Business Group on Health and on the same AHIP panel, gave an example of how badly narrow network propositions can go with employees. “One of my employers, his health plan has an [accountable care organization or ACO] that’s a value-driving system and he said, ‘I’m going to talk to my employees about it,’” she explained. “And the employees were incredulous — saying, ‘What do you mean we can only go there? Why are you pushing me into this system? — It just was a disaster. So he’s a little shy now about even attempting to suggest to his employees to use a health system like that.”

In the KFF poll, of employees with employer-sponsored insurance, 55% would rather pay more than have a plan that doesn't have as broad of a network as they’re accustomed. If the narrow network trend continues, and starts to creep into employer plans too, it could get some people’s attention in Washington. “Narrow networks have gotten the attention of legislators. … If you’re going to let more in, you've gotta compromise,” Frenkel’s Hasday says. “It’s a battle to rage and I don’t know what’s going to happen.”

The future

Potential legislation aside, Colorado broker Rick Ninneman thinks narrow networks are here to stay. “I think narrow networks have a future but not under the old delivery model, only under an exchange model,” says the Poms & Associates, Insurance Brokers, Inc. regional director. “What’s happening is the criteria in selecting a plan will be based on who their doctor is. Whereas the old way, the employer would pick a plan and they’d say, ‘Hopefully your doctor is on here.’”

He says that narrow networks will become an accepted strategy because of the industry’s battle to decrease the overall price of health care and the impending “Cadillac” tax on employers with too-high premium offerings.

“Oh, and by the way, good news — that’s a new role for us,” Ninneman says about advising employees within an exchange. “When benefit levels are more similar, we can’t be as creative.”

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