41 Percent of Obamacare Silver Plans Have ‘Small’ or ‘Extra Small’ Networks

I spent the weekend in Denver at the excellent Western Conservative Summit, where I spoke about health reform with Philip Klein of the Washington Examiner. Mr. Klein has written Overcoming Obamacare, in which he describes three schools of free-market reformers: The “reform school,” the “replace school,” and the “restart school.” (I belong to the “replace school.”) The panel was moderated by Dr. Jill Vecchio, a radiologist and Senior Fellow in Health Care Policy at the Centennial Institute.

Since the King v. Burwell decision, many have rebranded Obamacare as SCOTUScare, per Justice Scalia’s dissent. However, at the summit many said we should call it “Medicaid Plus,” because Obamacare beneficiaries have little access to care.

New research sponsored by the pro-Obamacare Robert Wood Johnson Foundation confirms that Obamacare plans have limited access to physicians. The research defines a network as “small” if no more than 25 percent of physicians in an area are covered, and “extra small” if it covers less than 10 percent. The results:

  • The “narrowness” or size of a network can be quantified, and 41 percent of silver plan physician networks in the ACA marketplace are small or extra small.
  • While consumers are likely to select plans with low premiums, they are not fully aware of the characteristics of narrow networks.
  • Well-functioning narrow networks will survive only if their characteristics are communicated more clearly to consumers and they are regulated to ensure adequacy.

This paper is extremely well researched, especially given the obstacles facing the researchers:

The provider lists from which these data were gathered were not uniform in their formats and coding. Thus we created a multi-stage cleaning process to integrate all lists into a list with unified formats for names, addresses, and specialties. We converted specialties, listed in more than 6,000 ways, into 47 specialty groups. Given the preponderance of errors in these lists including duplicates, misspellings, typos, misclassifications, and physicians who have relocated or retired, we confirmed unique physicians by matching the information to national provider datasets using a set of algorithms that allow for variation in the data.

And these are professional health policy researchers! Imagine poor Joe or Jane Public trying to choose a plan on an Obamacare exchange! There is a lot of talk about increasing regulation of disclosure of physician networks on exchanges. It will not work. There is a fundamental conflict of interest between the Obamacare beneficiary and the Obamacare health plan: The plan wants to enroll the healthy. Therefore, it has no interest in making it easy for beneficiaries to determine which specialists are in the network when they sign up, because only beneficiaries with the greatest need for care will seek that out.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.

John R. Graham is a former Senior Fellow at the Independent Institute.
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