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Narrow networks in 2017

Published on January 24th, 2017 by Triton Benefits & HR Solutions

While legislators discuss changes to the Affordable Care Act on an ongoing basis, a concrete timeline for those changes is still unknown. As Americans wait for the latest information, we looked at the 2016 Employer Health Benefits Report, conducted by the Kaiser Family Foundation and the Health Research and Educational Trust, to determine the average insurance premium for single employees and families getting coverage through work. The report concluded it was $6,435. for single coverage and $18,142. for families. This represented a 3 percent increase from average family premiums in 2015. Of course, these numbers include both employee and employer contributions, so out-of-pocket costs were much lower for those insured through work. The average single-employee contribution ranged from $943 to $1,237. However, no matter how you slice it, insurance isn't cheap. As such, employers are constantly on the lookout for ways to reduce costs for them and their staff. This may mean renewed interest in narrow networks going into 2017.

Folder with tab that says "insurance."Narrow networks make up the majority of plans provided by the ACA.

Narrow networks and the ACA
Narrow networks are a staple in the Affordable Care Act, and that will continue to be the trend in 2017. In fact, according to a McKinsey & Company report, 75 percent  of plans offered by the ACA will feature a narrow network. Simply, this means that on those plans, patients will have fewer provider options. However, the tradeoff is that these plans cost less than those with more health care providers. This is reflected in a report by the Employee Benefit Research Institute, which shows that those who are have no insurance prefer lower cost and a narrow network, while those insured at work would prefer the inverse.

In fact, few employers offer plans with a narrow network, instead opting to give their employees a broader range of care providers. The EBRI study also noted that only 7 percent of employers that offered health coverage in 2016 included a narrow network option. 

Why employers don't choose narrow networks
According to the EBRI study, employers are able to provide a variety of insurance plans that range in price and coverage without using narrow networks, so they may not feel they need them. Rather than create a large change in their offerings to save money, they might work in the framework they already have. What's more, employers often don't want to risk jarring their workforce with large insurance changes. Some employees may not be able to continue seeing their current doctors if they switch to a narrow network. Or, if they do, they'll pay out-of-network prices.

Modern Healthcare explained that lack of information is also often a concern for employees. Some insurers don't have up-do-date provider lists, or if they do, they're difficult to find. Companies considering narrow networks, then, should choose a provider with strong doctor-locating services.

It's unclear how popular narrow networks will be with employers in 2017, but most experts agree the plans will continue to exist in some form or another, even if in only a small capacity.