(Bloomberg) — The consumers likely to shop for qualified health plans (QHPs) on the new public health insurance exchanges are thriftier than the general public, with more picking health plans based on price rather than their choice of doctors, according to researchers at the Henry J. Kaiser Family Foundation.
While the general public prefers more expensive plans that cover a broader range of doctors and hospitals, 54 percent of those who are uninsured or who buy their own coverage select plans that cost less, even if they have less say in providers, the Kaiser researchers reported today in a survey summary.
Only 35 percent of that group — the QHPs’ target audience — would pick a more expensive plan with a bigger provider network.
“The individual market has always been more sensitive to costs,” Dan Mendelson, chief executive officer of the Washington-based consultant Avalere Health, said in a telephone interview. “They’re not used to relying on their employer to take care of them, they generally have less predictable income and they are more accustomed to paying out of pocket.”
As millions of Americans shop for QHPs through the exchanges created by the Patient Protection and Affordable Care Act (PPACA), consumers, insurers and providers are paying attention to the balance between cost and coverage.
Insurers say “narrow network” plans, which limit the number of doctors and hospitals covered, help to keep premiums low, while providers left out of the networks are worried about lost patient volume.
Narrow-network plans have proliferated on the public insurance marketplaces to cater to the preferences of PPACA exchange consumers. The government yesterday said 4 million people have now enrolled in QHPs for 2014 through the exchanges. Open enrollment ends March 31.
About 70 percent of plans on the public exchanges are “narrow” or “ultra-narrow” plans, according to a December study by consultants at McKinsey & Co. The consultants found that incumbent companies were offering three times as many narrow plans as they did prior to PPACA.
The narrow plans have also caught the attention of small employers and will soon become a staple of the industry outside of the public exchanges, Mendelson said.
“They really do move the needle,” he said. “When a small employer looks over at the rates quoted on the exchanges, they’re interested.”
A majority of small businesses would select a plan with a narrow network if they could save 5 percent of the costs, according to an October study of small businesses, published in health policy journal Health Affairs.
Next year, insurers may be required to expand the number of doctors and hospitals included in their plans, increasing their coverage to 30 percent of “essential community providers” from 20 percent this year, the U.S. Department of Health and Human Services (HHS) said this month. The insurance industry argues this requirement may lead to a rise in premium prices.
“It is important to ensure patients can continue to benefit from the high-value provider networks health plans have established, which are helping to improve quality and mitigate cost increases for consumers as the new health care reforms are taking effect,” Clare Krusing, spokeswoman for the America’s Health Insurance Plans said in a telephone interview.
–Editors: Andrew Pollack, Reg Gale
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