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The shrinkage of out-of-network coverage

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Leslie Small, in FierceHealthPayer,  writes about how more and more health insurers are questioning the concept of giving patients unlimited choices.

This f0llows  recent research showing  that insurance companies are offering fewer preferred provider organization (PPO) plans on the exchanges these days.

Kathy Hempstead, who directs coverage issues at the Robert Wood Johnson Foundation, told Ms. Small that, in Ms. Small’s words,  “Insurers are increasingly learning that the out-of-network component of PPO plans is problematic… adding those that made public announcements about dropping PPO plans have been frank about the fact that they’re losing a lot of money.”

An analysis by the foundation found that two-thirds of insurance companies that offered PPO plans last year on Affordable Care Act exchanges have either reduced or stopped offering them.

Ms. Small said that Ms. Hempstead says that, paraphrasing the latter, ”insurers are using network design to control costs because they have a limited ability to raise premiums, as consumers are highly cost-conscious, so instead they must try to lower utilization and limit pricey out-of-network care.”

Because of this trend in plan offerings, “consumers are going to seek less out-of-network care than they did before.”


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