Mass. Study: Limited Health Insurance Networks Save Money, Cause No Harm

Most patients, myself included, do not like to be told, "You can't see that doctor or go to that hospital." But the message is becoming more common as we, patients, or our employers choose what are known as "limited" or "narrow" network plans (note the not-so-subtle name change).

These plans are often cheaper than other options because they cut out expensive hospitals and because insurers negotiate better prices with hospitals and doctors who are promised our business.

But there's a backlash that's both real and hyped. Some of the hype is refuted by a study out today.

It looks at a broad movement toward limited network plans in Massachusetts in 2011, when state employees got a three-month "premium holiday" if they switched from more traditional coverage to the lower-cost option.

State employees who chose to switch reduced their health care spending by 36 percent.

"Clearly, this was a big cost-saver for the state," says study co-author Jon Gruber.

The savings, says Gruber, occurred because patients with limited network coverage relied more on primary care and less on specialists. There is no sign that patients received lower quality care or that their health deteriorated.

Gruber, who had a hand in creating both the Massachusetts coverage law and the Affordable Care Act, claims the political implications of this Massachusetts limited network experiment are profound.

"There's a lot of discussion about ObamaCare leading to more 'limited' choices," says Gruber, and "isn't that a shame." But Gruber says people in these plans "don't appear to be suffering."

This should be good news for those on the left, argues Gruber, who don't want any patient harm, and for those on the right who want lots of plan options.

Gruber did not review patient satisfaction, but there's no evidence that state employees fled limited networks after the first year.

Dolores Mitchell, who runs the state employee Group Insurance Commission, says enrollment has been rising, slowly, from 18 percent of all members in FY '12 to 20 percent this fiscal year.

Mitchell says the attacks on limited networks are a mistake.

"What we don't want to do is go back to the status quo, when every doctor in every hospital had to be in every plan, which meant no difference between plans," Mitchell says. "That's what got us into the trouble with costs that we're in now."

Mitchell acknowledges that there are frustrated patients, who didn't realize they wouldn't be able to see a particular specialist or go to any hospital in Boston.

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