Association for Public Policy Analysis & Management

Despite actions by the Trump administration that impede implementation of the Affordable Care Act (ACA), demand for marketplace-purchased insurance remains strong across the United States.¹ One of the important concerns about the success of the implementation of these marketplaces has been the adequacy of their networks.² Relying on similar approaches, numerous studies have shown that plans sold on the marketplaces tend to be relatively narrow.^3-6 Narrowness raises concerns about the ability of consumers to adequately access services. However, the issue of network adequacy holds important implications for all insurance approaches based on network design including Medicaid,⁷ Medicare Advantage,⁸ and Tricare.⁹

The objective of this research is to increase the relevance of network adequacy assessments to consumers. Our approach overcomes two important limitations of previous assessments. First, we harness geospatial information to gauge consumer access taking account of location. That is, we incorporate the distance between consumers and providers to assess network breadth. This approach improves the usefulness of information for consumers because it allows them to judge network breadth based on their residence, i.e. the place from which they are most likely to access health care services. Arguably, providers closer to home may be much more important than overall network breadth if many providers in broader networks are long distances away. Second, we confine the set of available providers to only those who are actively practicing and seeing patients for their respective specialties. We do so based on their inclusion in various quality reporting and all-payer-claims databases. This approach mimics the innovate network adequacy regulation developed in New Hampshire.¹⁰ Both adaptations are beneficial to regulators and consumers seeking to make informed plan choices. These advances allow us to provide a more meaningful assessment of “artificial local provider deserts,” that is, networks devoid of any providers due to network design. Finally, we incorporate all these adaptations into a useful graphical display based on the previous work of Polsky and Weiner.¹¹

California often is the trend setter for other health care markets around the country. It also has a well-functioning ACA marketplace in operation. We focused our study on the behavior of California insurers and gathered data for California’s cardiologists, endocrinologists, obstetricians and gynecologists, pediatricians, and cardiac surgeons. We linked these data to insurance plans sold on Covered California, the state's ACA marketplace, as well as to their commercial counterparts sold outside the marketplace, and compared these networks to all providers in the respective specialty.⁶

Overall, our analysis indicates that that ACA plans generally are narrower than their commercial counterparts Network design often creates significant access issues for consumers in California because of artificial local provider deserts. Access generally, and artificial local provider networks in particular, place an especially high travel burden on rural residents.