Insurer Network Ratings Are Bizarre, Inconsistent

What good is health insurance if the medical providers in network are unavailable? This is the problem posed by the contemporary American insistence on retaining consumerism and competition in much of our healthcare system. It’s easy to communicate and regulate price.  Cost sharing arrangements can be extremely complex but at least use of standardized vocabulary such as copay, deductible and coinsurance can regularize communications about the order in which insureds and insurers pay for medical expenses. Technology such as the Actuarial Value Calculator can even subject cost sharing to meaningful regulation. But how do we even begin to regulate the adequacy of provider networks assembled by insurers?  And how do we regularize insurer assertions about network strength? The lack of easy answers to these questions expose a vulnerability of our current system.  If we want consumers rationally to pick insurance plans and to thereby pressure insurers to provide good contractual performance, we need to make sure consumers understand the impediments the network imposes on receipt of bargained-for medical care. Unfortunately, as I now discuss, the recently released regulations from the Center for Medicare & Medicaid Services proposing to rate networks starting in 2017 are not likely to enhance rational choice.