Lewis & Ellis, LLC

More consumers cutting benefits to reduce health insurance costs

Health Care and Health Insurance
by Cabe Chadick
Recent health insurance trends are shifting.
Recent health insurance trends are shifting.

Over the last several years, the issue of affordability when it comes to health insurance has been a major concern for millions of Americans, especially as the cost of care rises but the benefits of their health insurance plans do not. Now, as a means of keeping their costs in check, it seems that many are turning to coverage that limits care options in exchange for lower prices.

Health insurance plans with smaller networks of hospitals and physicians are growing increasingly popular among cost-conscious consumers, simply because of how much less expensive they can be, according to a report from McKinsey and Co. The good news for people who use these small-network coverage is that their choice among these plans is growing quickly; last year alone 1,000 new networks were created, and 90 percent of people had access to both traditional plans and these more narrow alternatives, an increase from 86 percent last year.

Right now, 55 percent of plans available nationwide are still broad, while 22 percent are narrow, and 17 percent are considered "ultra-narrow," the report said. Another 6 percent are tiered networks. But among plans available in the largest city of each state - where it's likely that people are seeking more affordable coverage because they have lower incomes - only 38 percent of plans are broad, compared with 34 percent that are narrow, and 31 percent are ultra-narrow. The remaining 7 percent are tiered.

Is there a problem?
However, this trend toward lower-cost plans might also be coming because consumers don't necessarily understand all their options, the report said. In all, 44 percent of people who bought a plan through the federal or state health insurance exchanges for 2015 said that they don't really know how their health care networks are set up. Moreover, 19 percent who did the same for coverage last year say they're still a little uncertain of it.

This data may help to inform health insurance companies' decisions going forward, as it might behoove them to continually create a wider variety new plans with narrow networks that would more directly appeal to people looking to keep their costs down, but still give them broader choice when selecting coverage that fits in with their current plans. That, in turn, could lead to more enrollment interest among shoppers going forward.



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