Do you want to buy individual health insurance? If you’re looking for a plan that provides the essential health benefits required by the Affordable Care Act (ACA) legislation, the health insurance marketplace is a convenient resource for comparing plans and shopping.
You’ll find the ACA-qualifying plans available to you, along with a listing of premium rates, coinsurance percentage, and copayment and deductible amounts. But sometimes it’s harder to find details about which doctors and healthcare facilities you can access under a plan.
And depending on your health situation, it’s important that you’re easily able to learn about the providers covered by a plan. Otherwise, you may end up with a narrow network plan that restricts your healthcare provider choices – which could potentially leave you with costly out-of-pocket medical expenses.
In some circumstances, you might want to consider a non-ACA qualifying coverage solution, such as short term medical insurance. For example:
- You need coverage for a short period of time – such as you’ve started a new job and haven’t yet qualified for employer-sponsored health insurance
- You missed the annual open enrollment window and you’re not eligible for a special enrollment period
- You’re unable to find a plan on the marketplace that covers specific providers from whom you want or need to receive healthcare.
Remember, short term health insurance is not ACA-qualifying major medical coverage. These policies are not guaranteed issue (meaning you can be denied coverage due to pre-existing conditions) and do not include the range of covered services that major medical plans do.
What’s a Narrow Network?
There’s no denying the fact that healthcare costs continue to rise – for both consumers and health insurance companies.1 With health insurance companies now mandated under the ACA to provide coverage to almost all Americans, insurers continue to look for different plan designs to manage expenses and keep premium costs lower for individuals.
One type of plan structured to manage costs is a narrow network plan. Since the ACA took effect, a growing number of health insurance companies have started offering these plans.2
Narrow networks are only generally defined, however, their plans often have 25% or less of local physicians participating, with the most restrictive networks including only 10% of local doctors.3
Comparatively, health insurance plans with broad networks will generally have 70% or more of local providers participating.4
Nearly 75% of plans offered on the marketplace exchanges in 2019 use a restricted network plan design.5 The plans generally pay for coverage only when you receive services from doctors and facilities that are part of one medical provider system but may cover out-of-network services at a lower rate of reimbursement.
Insurance companies often select networks comprised of low-cost providers and providers which agree to accept reduced fees for services in order to receive a higher volume of patients. Some companies choose to exclude higher-cost providers, particularly those which decide not to accept the reduced fees offered by the insurance company.6
Narrow Network Plans Benefit Some Individuals
If you’re young and healthy, and typically just visit your doctor for an annual checkup, a narrow network plan might be a good choice for you. Benefits associated with this type of plan include:
Lower premium costs – according to Health Affairs research from 2017, a narrow network plan may be 16% cheaper than a plan with broad networks, in addition, narrowing the breadth of just one type of network was associated with a 6% to 9% decrease in premium cost.8
Potential for reduced out-of-pocket costs – studies9 show that medical costs can vary significantly not only within the U.S., but even within the same metropolitan area. When insurance companies select network providers that charge lower prices, your out-of-pocket costs can be lower.
Fewer administrative responsibilities for the patient – when you receive all of your care within your plan’s designated network, your providers can easily access your records, so you don’t have to request record transfers from provider to provider. In addition, narrow network plans typically don’t require referrals when you visit specialty providers located within your plan’s network.
Non-medical benefits designed to promote better health10 – some narrow network plans include services focused on keeping you in good health, such as free health coaching, telemedicine, education and care management for high-risk chronic health conditions and access to cost saving tools.
Challenges of Narrow Network Plans
Despite having benefits for some individuals, narrow network plans may not be the best choice for every consumer. Some of the disadvantages of narrow network plans include:
Limited specialty providers – access to specialty providers can be challenging in narrow network plans. A 2015 Harvard analysis of 135 plans sold on the Federal exchange found that nearly 15% of plans totally lacked in-network providers for at least one specialty, across multiple states and insurance companies. The most impacted specialties being psychiatry, endocrinology and rheumatology. Accessibility can be even more challenging for consumers in rural areas.11
Access issues for consumers in rural areas – finding even a primary care doctor located within a narrow network can be especially challenging for rurally-based individuals, with long wait times to be able to see a doctor or being forced to drive long distances to see a network provider.
In 2015, Montana’s insurance commissioner testified before the U.S. House of Representatives that she had to urge insurance companies selling marketplace plans in the state to include at least 80% of providers in their plans, which is significantly higher than the percent of available providers typically included in a narrow network plan.
The commissioner stated that some Montanans could be left with “the closest essential community provider being 400 miles away.”12
Provider directories not always accurate – error-filled directories – whether listing providers who aren’t actually part of the covered network, or have inaccurate information such as incorrect phone numbers or addresses – have been such an issue for marketplace plans that in 2016, the Centers for Medicare & Medicaid Services (CMS) began fining health insurance companies for errors in provider directories.13
But as late as December of 2018, Betsy Imholz of the advocacy group, Consumer Union, reported to the National Association of Insurance Commissioners that health directories continue to remain inaccurate with doctors dropping in and out of networks “all of the time.”14
Surprise out-of-network bills – one of the most concerning problems with narrow network plans arises if you receive healthcare services from an out-of-network provider. This fairly common situation can occur when:
- A provider directory isn’t updated
- Patients are provided inaccurate information about whether a provider participates in the network when making an appointment or scheduling a healthcare procedure
- A patient receives emergency treatment at an out-of-network hospital or urgent care facility (in some states)
- Care is provided by an out-of-network doctor located within an in-network facility.
Surprise medical bills occur frequently. A 2018 Consumer Reports survey found that over the past two years, one in 10 Americans had been surprised to find that a doctor, lab or facility they thought was in their narrow network plan actually was not.15
In fact, surprise medical bills have become such a problem that some states are taking legislative measures to protect patients who visit a network facility, but are later billed for services provided at the facility by out-of-network doctors. The state of Washington passed a measure in March of 2019 to address this issue.16
Even President Trump has noted that it’s time for legislative action to protect patients after hearing the story of the Sprechers. The Washington couple is facing thousands of dollars in medical debt after the wife was hospitalized for a medical emergency in their network’s approved hospital – but was treated by out-of-network providers.17
Considerations If You Purchase a Narrow Network Plan
If you’ve reviewed the pros and cons of narrow network plans and have decided that this plan is right for you, here are some thoughts to keep in mind.
Check if your providers are included in the network
If you want the ability to keep visiting your preferred providers, do your research.
- Use the provider search tool online at the insurance company’s website. The ACA requires insurers to provide an updated directory associated with a plan on the public website which lists the plan.18
- Call your doctors’ offices to ensure that they are part of the network – even if they are listed on the provider directory, as sometimes the listings are not accurate.
What to do if you receive services from out-of-network providers in an emergency
There are no federal laws that protect against surprise medical bills from out-of-network providers, though some states have them. With the rising tide to protect consumers in emergency situations, the provider or facility may be willing to work with you to help reduce your financial liability.
Consider these ideas:
Contact the billing department of the provider facility – if you were incapacitated during the emergency or didn’t have time to check the network status of the facility or providers, the facility may be willing to negotiate the bill with you.
Appeal to your insurance company – under certain situations, the company may be willing to reconsider benefits. It may be helpful to have your doctor write a letter on your behalf and explain the circumstances.
Check if your state has a consumer assistance program – this type of consumer advocacy group can provide you help and offer best practices for reducing your medical liability.
Alternative Insurance Options
If you’re unable to purchase a marketplace plan, or want to explore different coverage options, you have choices.
Short Term Health Insurance
It’s important to recognize that short term health insurance does not meet the requirements of the ACA and pre-existing conditions typically are not covered. Instead, this type of insurance is designed to help you pay for unexpected medical expenses, such as doctor office visits, hospital room and board, surgery and emergency room treatment.
Another key feature of short term medical insurance is its flexibility. You may choose how long to keep your policy, as well as selecting a coverage start date, usually within 24 hours of being approved for coverage.
Short term health insurance has less coverage than benefits provided by ACA-compliant plans, which usually means that premiums for short term medical insurance are significantly lower than premiums for an ACA marketplace exchange plan. However, premiums for short term health insurance will vary depending on the benefits you select.
Want to find out how much a short term policy could cost you?
Supplemental Insurance Products
The health insurance market offers a number of standalone products that may help you pay for your medical care costs. A health insurance agent can work with you to ensure coverage availability in your state.
- Critical illness insurance – provides a lump sum cash payment if you’re diagnosed with a specific illness covered by the insurance policy
- Dental insurance – pays a portion of costs for preventive, basic and major dental care services
- Hospital indemnity insurance – also known as limited benefit insurance, pays a set amount for certain covered illnesses and injuries. Please note that hospital indemnity insurance may not be purchased if you do not already have a major medical policy in certain states.
Although it is not health insurance, telemedicine also can help provide you access to healthcare services at a reduced cost. With a telemed subscription, you pay a monthly subscription fee and a per-consultation fee.
In return, you receive the convenience of engaging in a virtual doctor’s visit from home (or anywhere). Doctors can diagnose minor health issues and issue prescriptions if necessary. (Telemedicine is not insurance.)
Summary + Next Steps
If you’re considering purchasing individual health insurance on the marketplace exchange, be sure to do your homework. A narrow network plan limits your provider options, so check the online provider directory associated with the plan you’re thinking of purchasing. You may even want to call your doctor’s office to confirm that they participate in the plan’s provider network.
Taking the time to research your provider options can help you avoid surprise medical bills.
If you’re interested in an alternative product like a short-term medical policy, you can get an instant (free) quote to see if it’s available in your state and view coverage options, including premium and deductible amounts.