Shrinkflation in Health Insurance

When it comes to choosing health insurance, many consumers are desperately seeking guidance on Reddit - No idea what insurance to pick, SOS!

I just got a new job and now have access to health insurance. Can someone help me choose between plan A and plan B? Here’s the price, deductible, out-of-pocket max, and coinsurance.

No one ever mentions networks because it may seem less obvious. Choosing a plan with a narrow network can mean unexpected costs and trouble finding care down the line. Unfortunately, this crucial factor isn't always easy to evaluate.

The ACA marketplace offers a great case study. In Chicago, there are a whopping 117 plans available. Using Blue Cross Blue Shield as an example, I ranked the 11 Bronze plans by price. These plans come with a price tag that mirrors their size of provider networks – a phenomenon I like to call “shrinkflation” in health insurance.

You can find an “affordable” plan but the number of doctors and hospitals you have access to is getting smaller and smaller. Just how much smaller?

To figure this out, I analyzed the individual providers covered by the HMO plans and their specialty areas. (Now, let's set aside the fact that ~50% of provider directories contain inaccurate information – that's a topic for another day.) The Euler diagram below shows how primary care provider coverage measures up against each other. Specialists, while much smaller in size, follow the same pattern. The 4 specialty areas are highlighted because they contribute to the highest medical spend.

Now, the real question for consumers: What's the ideal network size for me? Does having 2,000 PCPs cut it? Or is 10,000 the magic number?

The WHO estimates that at least 2.5 medical staff per 1,000 people are needed to provide adequate coverage with primary care interventions. Considering there are 4.4 million people under age 65 living in Cook County (where Chicago is) and assuming half of them are covered by Blue Cross Blue Shield, you’ll need at least 5,500 PCP providers to meet the criteria. Only the Blue Precision plan provides adequate coverage. And if you're wondering, that’s the plan I chose.

To help you find plans with the most robust networks, I created ACA Navigator to provide you with this critical information, ensuring you make informed decisions about your insurance coverage.