Report: ACA plans have a third fewer providers than employer-based plans

Consumers who signed up for coverage on health insurance exchanges last year have access to one-third fewer doctors and hospitals, on average, than people who have insurance through traditional employer-based coverage, according to an analysis released Wednesday.

The research by Avalere Health, a consulting firm, provides a numerical basis for anecdotal reports from consumers and others about more limited doctor and hospital choices available for plans offered on the insurance exchanges created by the Affordable Care Act.

In these "narrow networks," health insurance plans sign contracts with providers that charge lower prices and limit consumers to those doctors and hospitals in exchange for lower costs. Less choice in a health plan typically means lower premiums. Depending on the type of plan, consumers who choose to use providers outside the network pay more.

Compared to traditional commercial plans, Avalere found that exchange plan networks included 42 percent fewer cancer and cardiac specialists; 32 percent fewer mental health and primary care doctors; and 24 percent fewer hospitals than provider networks in employer-based coverage.

For consumers buying insurance on the exchanges, it is important for them to know that not all doctors and hospitals are going to be included in their plans. If consumers are attached to a particular doctor, they should check to see if the doctor is included in the network.

Consumers who can use out-of-network doctors and hospitals may also find themselves hit with higher costs because those costs may not count toward their deductibles or out-of-pocket maximums.

Insurance companies tend to be excluding traditional, high-cost teaching hospitals and "expensive, prestigious providers" from the networks, said Dan Mendelson, Avalere's chief executive. That's not necessarily bad for consumers, he said, because choice does not always improve quality of care.

A more tightly controlled network of providers could mean better management of chronic conditions, such as diabetes and high blood pressure.

In a February 2014 tracking poll, the Kaiser Family Foundation found that the people most likely to buy coverage through the insurance marketplaces were more willing than the public at large and people with employment-based coverage to accept a narrow network of doctors and hospitals in exchange for lower costs.

Overall, more people said they would rather have a plan that costs more money but allows them to see a broader range of doctors and hospitals than a less-expensive plan that allows them to visit a narrower network of providers.

But people who are uninsured or who purchase their own coverage directly -- the target customers for the exchanges -- saw the tradeoff differently. A majority (54 percent) of this group said they preferred less costly, narrow network plans to more costly broad network ones, compared to just over a third (35 percent) who feel the other way. In general, older people and those with higher incomes show a clear preference for broad networks, even if they cost more, while younger people and those with lower incomes are more evenly divided.

Avalere researchers analyzed data submitted by the health plans for the largest rating region in each of the five states that had the highest exchange enrollment for 2015 coverage: Florida, California, Texas, Georgia and North Carolina. Avalere compared the average number of providers in exchange networks compared to commercial networks in the same geographic area for each of the five categories of providers.