Private insurance plans are increasingly limiting out-of-network care, especially in the individual market, according to a new Robert Wood Johnson Foundation report.
The report said that only 29% of individual plans provided out-of-network coverage compared to 58% more than three years ago. Small group market plans have cut out-of-network benefits too (64% in 2018 compared to 71% in 2015), but not as commonly as the individual market.
Payers that still offer out-of-network coverage have shifted more costs onto consumers. The individual market’s median out-of-network deductible is about $12,000. Nearly one-third of individual plans with out-of-network coverage have a deductible that’s more than $20,000. Once the deductible is met, members still have to pay more out of pocket, including co-insurance. Many individual plans don’t have maximum out-of-pocket limits for out-of-network care.
With individual market networks narrowing, patients are seeing more bills coming as a surprise.
It's a bad scenario for both consumers and hospitals: Patients stuck with a massive unexpected bill could skip paying it altogether and leave the hospital without settling up.
A recent Kaiser Family Foundation study found that about 20% of hospital visits in large group plans wind up with an out-of-network bill. Some states are starting to target surprise billing with policy guardrails, but consumer protections are still scant. Congress is also looking at its own legislation on the matter.
Health plans in the individual market and Medicare Advantage have turned to narrow networks as a way to contain health costs. Plus, national payers, which often have broad networks, largely abandoned the ACA marketplace in 2016 and 2017. This exodus left behind Blues and payers that specialize in Medicaid managed care, which often have narrow networks and closed-network plans.
The report said that shift made out-of-network care increasingly rare in those segments.
This is particularly so in the fully insured market, but narrow networks aren’t as common in large employer plans. KFF’s recent annual Kaiser Family Foundation Employer Health Benefits Survey found that only 5% of large companies with health insurance offered a plan with a narrow network. That was a similar percentage the previous two years.
Perhaps not shockingly, health plans with narrow networks can find savings. In its study of 2015 MA plans, KFF found broad-network HMO premiums averaged $54 per month while narrow-network plans cost only $4.
Despite those potential savings, employers have on the whole avoided restricting provider access, concerned about facing employee anger when confronted with fewer care choices — especially in rural care deserts, or with patients with complicated needs.