Objective: To examine how plan premiums are associated with physician network breadth, hospital network breadth, and hospital network quality on the Affordable Care Act's Health Insurance Marketplaces in all 50 states and the DC in 2016.
Data sources: Data on plan premiums and characteristics came from 2016 Robert Wood Johnson Foundation Health Insurance Exchange (HIX) Compare. Provider network information was obtained from Vericred. Hospital characteristics were obtained from CMS Hospital Compare and the American Hospital Association (AHA) survey.
Study design: We analyzed how plan premiums were associated with variations in physician network breadth, hospital network breadth, and hospital network quality using ordinary least square regressions with state-rating area fixed effects and carrier fixed effects.
Principal findings: Plan premiums were positively associated with physician network breadth and hospital network breadth. We find the following statistically significant results: a one standard deviation increase in physician network breadth was linked to a premium increase of 2.8 percent or $101 per year; a one standard deviation increase in hospital network breadth was linked to a premium increase of 2.4 percent or $86 per year. There was no significant association between premiums and hospital network quality, as measured by hospital star ratings and the inclusion of teaching hospitals or the top-20 hospitals nationwide.
Conclusions: Physician network breadth and hospital network breadth contributed positively to plan premiums. The roles of the two types of provider network breadth are quantitatively similar. Premiums appear to be insensitive to hospital network quality.
Keywords: Affordable Care Act (ACA) Health Insurance Marketplace; hedonic pricing; narrow network; network quality; plan premium.
© 2020 Health Research and Educational Trust.