Narrow Networks, the Very Sick, and the Patient Protection and Affordable Care Act: Recalling the Purpose of Health Insurance and Reform

Abstract

Consumers purchasing health insurance on both state and federally-run exchanges are finding that affordable premiums may come at the cost of restricted provider choice. So-called narrow networks are increasingly popular in individual, small group, and large group insurance markets as a means for insurers to curb premiums and compete for business. As PPACA regulations limit medical underwriting and homogenize insurance offerings, insurers are agreeing to nudge their patients to a narrow selection of providers in exchange for better reimbursement rates and lower premiums. This may mean wider availability of health insurance for the public, increased enrollment for insurers, and cost-savings across the health care system. In this article, the author argues that narrow networks, in their most extreme, create the very same access issues that the PPACA attempts to eliminate. By sorting the population (and insurance premiums) according to healthy and sick, they pose distributive justice challenges, strain the goals of social health insurance, and create barriers to care for those who most need health insurance (the very sick who access tertiary care); particularly if narrow networks continue to exclude academic medical centers, as this first year on the exchanges has foreshadowed.