Monthly Premiums in Narrow- versus Larger-Network Plans

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Extra-small-network plan has less expensive monthly premium than large-network plan.
Extra-small-network plan has less expensive monthly premium than large-network plan.

HealthDay News — Narrow-network health insurance plans have lower monthly premiums than larger-network plans, according to a study published in the October issue of Health Affairs.

Daniel Polsky, PhD, from the University of Pennsylvania in Philadelphia, and colleagues estimated the correlation between provider network breadth and plan premiums. They used data from all silver plans offered in 2014 health insurance exchanges in the 50 states and the District of Columbia.

The researchers found that for plans of otherwise equivalent design within a market, after they controlled for issuer-specific pricing strategy, the monthly premium was 6.7% less expensive for a plan with an extra-small network than for a plan with a large network.

"Our findings confirming lower premiums for narrow-network plans have important policy implications for the successful implementation of narrow networks in the health insurance Marketplaces," the authors write. "The lower premiums from narrow networks help reduce the number of uninsured people and reduce the cost of achieving that policy objective."

Reference

Polsky D, Cidav Z, Swanson A. Marketplace plans with narrow physician networks feature lower monthly premiums than plans with larger networks. Health Aff (Millwood). 2016;35:1842-1848.

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