July 3, 2014:
Under the Affordable Care Act health insurers have limited options for reducing premiums in the individual and small group markets, since the law prohibits them from discriminating against people with medical conditions and it requires that a standard package of benefits be covered. That’s why in the ACA marketplaces they’ve turned to using limited networks of health care providers who exchange discounted fees for greater access to patients covered by the health plans. The limited networks have drawn fire from some consumer advocates as well as from ACA critics, who argue that they may result in people not being able to keep their doctor.
But the health insurance industry is fighting back against that argument, in the hope that it won’t fall victim to the unpopularity that emerged against managed care plans in the 1990s. July 2 America’s Health Insurance Plans (AHIP), which represents most of the U.S. health insurance industry, released a report it commissioned from actuarial firm Milliman finding that “high-value” networks of health care facilities and medical professionals resulted in premium reductions of between 5 percent and 20 percent compared with health plans using broad networks. That could be a significant savings for the very price-conscious marketplace consumers.
One caveat Milliman found is that actual claims experience for some of the health plans “tended to produce a smaller reduction in actual claims costs than reflected in pricing.” But it was still a “meaningful reduction,” according to the report, “High-Value Healthcare Provider Networks.”