Here’s another “Ask Gravie” post giving readers our perspective on a hot health insurance-related topic. This week we’re featuring Mike Fortner, Sales at Gravie. Read on for his take on narrow networks. If you have a question or a topic you’d like us to address, send it our way using the form to the right or send us an email at firstname.lastname@example.org.
Q – We’ve been hearing a lot about narrow networks as an option to reduce health insurance premiums. What is a narrow network?
Offering a plan with narrow network is an approach employers can use to control their health insurance costs. Traditionally, the only ways to control costs were to shop for lower-cost companies/plans or adjust the level of the policy offered (e.g., coverage, deductibles, contributions, etc.). In a narrow network, the number of in-network options is reduced, and comprised exclusively of lower-cost providers; the most expensive providers fall out of network.
Viewed another way, the exact same policy with more provider options would be significantly more expensive. A good analogy is buying a cable TV plan that costs $200 a month and gives you hundreds of channels versus subscribing to Netflix for $7.99 a month and having fewer viewing choices.
It’s important to note that there’s no correlation between cost and quality; narrow networks simply are made up of providers who offer similar care at a lower price. Similarly, a limited number of providers doesn’t mean limited services – narrow networks offer the same services as others.
Q – What does a narrow network mean for individuals?
Simply stated, narrow networks mean fewer provider choices and cheaper premiums but a comparable quality of care.
Q – As an employer, what should I be aware of?
The costs with a narrow network are approximately 20% less than a traditional network model. That, coupled with the quality and the ability to stay with a current broker/insurance company, makes narrow networks an attractive option for employers wanting to alleviate the impact of rising costs.
The challenge for employers when it comes to narrow networks is the potential for dissatisfied employees. Because it’s a one-size-fits all approach requiring every employee to participate in the same way, a narrow network forces people who are heavy users of the healthcare system to potentially change doctors, clinics, hospitals and other care outlets. For employers that operate under a “do no harm to anyone” philosophy, narrow networks tend to be impractical.
There are other options for reducing a company’s health insurance costs, however. Gravie, an approach in which employers provide compensation to employees who can use that money to buy health insurance in the individual market, can present a variety of plan and network options to each of your employees as they shop for the plan that suits them best; if they want more choice than a narrow network provides, they can pay more. With Gravie, employers save, on average, between 30% and 40% on health insurance costs. Employees usually save money, too, and typically get a plan that’s comparable or better than the one they had in their group plan.
To put it simply, Gravie makes a lot of sense. If you’d like us to take a look at your company and estimate the savings you could see, call us at 844.540.8701, fill out our employer form, or tweet us @gogravie.
What questions do you want answered in “Ask Gravie”? Let us know and we’ll do our best to get you the answer.
About Mike Fortner
Mike Fortner is in sales at Gravie and has been with the company since before its launch. Mike has spent his entire career in the employee benefits industry. He’s held positions in sales and management working for health plans, consulting firms, and healthcare technology companies.
Prior to Gravie, Mike was one of the first employees at Bloom Health, a pioneer in Employer Sponsored Private Exchanges.