Since passage of the Affordable Care Act (ACA), insurance companies have worked diligently to retool and tweak their offerings to accommodate the requirements and demands of the law. Some of these changes have made it more difficult to accurately compare insurance plans and benefits. One area of change health insurance consumers must be aware of is the use of “new networks.”

A provision of the ACA has the effect of limiting insurance companies spending on overhead by requiring the companies to spend at least 80% of premium revenue on “medical care and efforts to improve the quality of care.” When matched with the requirement to provide all 10 Essential Health Benefits[link] in each plan, the insurance companies look for ways to control spending.

One way to do this is by creating new provider networks that limit the doctors and hospitals included as “in-network” providers. Typically, these networks rely on providers that offer the best discounts to that insurance company. The result is a provider network that stands beside the insurer’s traditional network. Another is to make the plan an HMO design[link], to make the less-expensive network required for exclusive use by policyholders.

Given what we have, how should a consumer think about all this in choosing health insurance? Here are some ideas:

  1. If you are a new consumer of health insurance, none of this may matter to you. Pick a doctor from the new network and have coverage if you need an emergency room or generate big medical bills.
  2. If you’re facing the double-whammy of high premiums and low use of the plan (that is, you never get sick), you may be willing to give up any out-of-network doctors in exchange for lower premiums.
  3. If you have significant, ongoing medical costs, specialized doctors/facilities, or travel a lot, you may require the traditional type of health insurance. Happily, there are still PPOs[link] with national networks to serve these needs as well.

What’s right for you? CHB is always available to provide quotes and help with making decisions among the various plans and companies.