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As each year passes, health insurance carriers that stay on the marketplace have presented their customers with smaller and smaller networks. This has significantly impacted insurers, causing them to change doctors or eliminate their coverage altogether. So why have health insurance carries become so picky about the plans they offer and the limitations they impose on these networks?

Preferred Provider Organization (PPO) plans are the most flexible and the most valuable plans on the market. Exclusive Provider Organization (EPO) and Health Maintenance Organization (HMO) plans, meanwhile, are the most inflexible for the consumer. Most doctors do not accept these plans. Referrals are required for patients to see a specialist. These plans run major risks for those who travel across country or state lines due to tight networks.

Yes, their prices look appetizing. But using the coverage is always a hassle for the consumer. The same applies to employers when they change from a PPO to a Point-of-Service (POS) plan or a different HMO network. Then, it is the consumer who suffers.

For example, a 34 year old female from Maryland will see the following two Blue Cross Bronze plans. The first is an HMO, the second a PPO. Both plans reflect a 91% increase from 2018 to 2019 on the marketplace. Both plans have a 0 tax credit shown, and real rates without sponsorship from the federal government.

Blue Cross Bronze HMO Plan

Fig. 1, Blue Cross Bronze HMO Plan


Fig. 2, Blue Cross Bronze PPO Plan

Fig. 2, Blue Cross Bronze PPO Plan

But what happens if the carrier pushes a dramatic rate increase or a state commissioner denies carriers market access? Carriers will try different approaches because they know that plans will be discounted and/or subsidized by the federal government for those that do qualify. They will shrink the network down to make sure it fits in with market pricing—even then they take a loss.

This is also happening on the employer side of group plans as well. Companies offering PPO plans will often see rate increases by the carrier, again due to ACA modifications that vastly increased health pool size.This difference is paid by the employer, which often comes from the employee’s paycheck. Employers will then shop for better pricing, usually dropping from a PPO plan down to an HMO or a POS plan—or switching carriers altogether.

Last fall, a family of three in Virginia on a United HMO explained that their company’s 100 employees “broke the pool,” and now the employer is searching for another carrier while many families face ongoing treatments and illnesses.