McKinsey analysts tracked the exchange plans in 2014 and 2015, comparing the network offerings, and probing consumer sentiment with a survey. According to McKinsey principals Noam Bauman and Erica Coe, there are five main things to keep in mind.
1. So many options
Consumer choice has expanded, from narrow networks, ultra-narrow networks and tiered networks with more choice. However, many consumers remain unaware of the network choices, Bauman and Coe found. And overall, the proportion of narrow networks and their relative narrowness has not changed — they’re still here to stay.
2. Narrow means cheaper
Median premiums continue to be lower for narrow network plans than broader network plans, which isn’t a surprise. In one case, analysts found the absence of an academic medical center from a network was associated with lower premiums. Among narrow network plans, median premiums are 10 percent higher for plans with an academic medical center than for those without. An open question is whether the consumers buying the narrow network plans do so knowing the limited provider choices, and whether state or federal regulators end up stepping in to either limit the extent of narrowness or require disclosures.
3. Widening gap compared to broad networks
Some health plan designs — like managed care features and limited out-of-network coverage — have had a “compounding effect on the median difference in premiums between narrowed- and broad-network plans,” analysts wrote. Among silver plans, 64 percent of narrow network plans are part of health maintenance organizations or exclusive provider organizations, compared with 43 percent of broad network plans. More than half of the silver tier narrow network plans have limited out-of-network coverage, compared with 37 percent of broad network plans.
4. Branding matters
Exchange plans co-branded by an insurer and provider have lower median premiums than plans offered solely by providers, McKinsey found.
In the current year, 73 providers sold their own health plans on the exchanges, and 63 other providers participated in a co-branding of a plan with an insurer. Most provider-led plans, and almost all co-branded plans, have narrow networks, at 64 percent and 98 percent. But co-branded plans are almost twice as likely as provider-led plans to have ultra-narrow networks, 57 percent compared to 33 percent.
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Median premiums were also 12 percent higher for provider-led plans than for co-branded plans, and in markets where they were both sold, co-branded plans were three times more likely to be the lowest-priced plan.
5. Not so satisfying
Consumers who bought narrow network plans in 2014 said in the survey that they were less satisfied with their payers than purchasers of broad network plans did, although only a small number said that they ended up switching to a broad network plan.
Twitter: @AnthonyBrino