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Exchange Customers Have Access to Broad Network Plans, Survey Shows

By John Reichard, CQ HealthBeat Editor

June 10, 2014 -- The overwhelming majority of health insurance exchange customers have a choice between large and more costly provider networks and smaller more affordable ones according to a new survey by the McKinsey and Co. consulting company.

Critics of the health law have complained that exchange products limit choice of providers, even though in many instances shoppers in the marketplaces have no prior insurance and therefore had little or no choice of providers at all.

But McKinsey, which said its findings come from examining exchange insurance products in all of the "metal" tiers of coverage in the 501 rating areas in the nation, concluded that broad networks are available "to close to 90 percent of the addressable population."

In addition, narrower networks are available to 92 percent of that population; they make up about half (48 percent) of all exchange networks across the U.S. and 60 percent of the networks in the largest city in each state, the report found.

Compared to plans with narrowed networks, products with broad networks charged 13 to 17 percent more on average.

Nationwide, "close to 70 percent of the lowest- price products are built around narrow, ultra-narrow, or tiered networks," McKinsey stated.

The survey found "no meaningful performance difference" between broad and narrow exchange networks on federal measures of hospital care that take into account the outcomes of treatment and patient satisfaction. "However, broad networks have higher rates of academic medical center participation," it said.

Fourteen percent of all acute care hospitals participate in very narrow networks offered by exchange plans.

The survey found that consumers weren't always aware that their plan had a narrow network. And typically the exchange plans with narrow networks didn't offer access to all of the hospitals within a participating health system.

When it surveyed consumers in April, McKinsey found that 26 percent who said they'd enrolled in a plan offered under the health law were unaware of the network type they selected. And in 75 percent of silver-tier products with very narrow networks, the plans only offered some of the hospitals in a participating health system.

McKinsey said the database it examined for the study includes all 282 payers filing on 2014 exchanges and all 4,773 acute care hospitals in the U.S. The payers offered a total of 20,818 exchange products, which included 2,366 unique individual exchange networks.

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