Striking the right balance between the breadth of an insurer’s provider network and the cost to consumers—in terms of both premium prices and access to care—has been a trouble spot around the country. Insurers encourage consumers to use in-network providers by offering low coinsurance and copays; if consumers are forced to go out-of-network for care, they could pay much more than they bargained for when they signed up. It should come as no surprise that the networks are small. This spring, Jim O’Connor, an actuary with the Milliman firm, told me that insurers were offering narrow networks as a way to market a low premium to consumers. But a low premium comes at a price—consumers may not have many or any doctors for some special need, or they may be inconveniently located or provide poor care. As Kreidler found, networks can be too narrow, and the potential real price to consumers too steep.
In Washington, both the Business Journal and The Seattle Times have been on this story. But the significance of the what’s-the-right-amount-of-competition question has yet to generate much press attention in other states, and it should. This question is at the heart of the price/benefit calculus—how good will insurance policies be, and is the price reasonable for the coverage? Whether the exchange takes an active role in judging these policies or allows every Tom, Dick, and Harry to sell has been central to the dispute in Washington over who can offer policies to the public. Reporters in other states ought to explain how this issue is playing out in their backyards, too.
Untangling Obamacare: What’s behind the rate increases?