Rules Insurance Carriers Must Follow

Network adequacy rules help ensure that health insurance plans have enough healthcare providers so that people enrolled in the plan do not have to go out of the plan’s healthcare provider network to get care.

This article will explain how network adequacy rules work, why they’re important, and what qualified health plan enrollees can expect under the new regulations that take effect in 2023 and 2024.

Virtually all modern health insurance plans—including all plans sold in the health insurance exchanges/marketplaces—have healthcare provider networks. That means the health plan has contracted with a specific list of medical providers who have agreed to a certain fee schedule for the health plan’s members.

Some health plans will only cover care received from healthcare providers in their network unless it’s an emergency. Other health plans will cover out-of-network care but usually with much higher out-of-pocket costs.

The details will depend on whether the health plan is a health maintenance organization (HMO), exclusive provider organization (EPO), preferred provider organization (PPO), or point of service (POS) plan, and on the specific rules that the plan has.

A fairly small (narrow) healthcare provider network can help an insurer manage its costs. Insurers offering lower reimbursement rates will likely have fewer healthcare providers willing to join the network. This results in a smaller network but also lower overall costs for the health plan, which translates to lower monthly premiums for enrollees.

On the other hand, insurers that offer higher reimbursement rates to healthcare providers are more likely to attract a larger number of healthcare providers who want to join the network.

But there also have to be rules to ensure that plan members can access in-network healthcare providers when they need health care. If a network is too narrow, enrollees may be unable to continue with their primary healthcare provider and might have trouble accessing specialty care.

To address this, the Affordable Care Act requires qualified health plans (QHPs, which include all health insurance plans sold in the exchanges) to have adequate healthcare provider networks. But the regulatory oversight of this has been spotty and has varied from one state to another.

What Is the Affordable Care Act?

The Affordable Care Act (ACA) is a landmark piece of legislation that was enacted in 2010. Most of its provisions took effect by 2014, including the creation of a health insurance exchange in each state (most states use HealthCare.gov, which is the federally-run exchange).

In each state, private health insurance companies sell…