Narrow Networks, Lower Premiums

Narrow Networks, Lower Premiums: It’s no secret that the contours of health care in our country have been reshaped by the Affordable Care Act. And, whether or not you agree with that change might have a lot to do with where you fall along the political spectrum. But, while the kneejerk reaction may be to immediately focus on what’s gone wrong superficially, due consideration must be paid to what’s going on behind-the-scenes, and, more importantly, why something that looks bad on the surface, may in fact be good in the long-run. One such example is the concept of “narrow networks”. At first glance, the idea of placing limits on the doctors and hospitals available to health plan subscribers seems to fly in the face of one of the health care law’s stated promises. Rhetoric aside, however, upon further examination, experts have begun to make the case that less choice in a health plan typically leads to lower premiums. By only targeting providers that charge lower prices – without sacrificing proven outcomes – plans are able to bring down the costs of health care with no compromise to quality. Additionally, by limiting their networks, insurers gain the leverage they need to keep that focus on costs and quality. Though some believe that the ACA has caused this shift, there’s growing evidence that the law has only accelerated an existing trend – a trend, some put forth, that is characteristic of any well-functioning consumer market where a variety of choices with differing value propositions is made available at different price points.