Narrow Networks on the Health Insurance Exchanges: What Do They Look Like and How Do They Affect Pricing? A Case Study of Texas
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AbstractThe Affordable Care Act has engendered significant changes in the design of health insurance products. We examine the "narrowness" of hospital networks affiliated with plans offered in the first year of the marketplaces. Using data from Texas, we find limited evidence of a tight link between pricing and a simple measure of network breadth, or a more complex measure of network value derived from a logit model of hospital choice. The state's largest insurer priced its narrow networks at a fairly constant discount relative to its broad networks, notwithstanding significant variation in its broad-narrow gap across geographic markets in Texas.
CitationDafny, Leemore, Igal Hendel, and Nathan Wilson. 2015. "Narrow Networks on the Health Insurance Exchanges: What Do They Look Like and How Do They Affect Pricing? A Case Study of Texas." American Economic Review, 105 (5): 110-14. DOI: 10.1257/aer.p20151081
- G22 Insurance; Insurance Companies; Actuarial Studies
- H51 National Government Expenditures and Health
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I13 Health Insurance, Public and Private