December 20, 2024
For DOL, ARC looked at in- and out-of-network plan richness (actuarial values) for employer sponsored insurance plans, with the analysis examining differences by size of employer, sector, plan type, Census region, premiums, and funding type (self-funded, level-funded and purchased). The goal was to assess the limitations of traditional measures of plan richness that consider only in-network benefits. Overall, the average in-network actuarial value for 2021 was 0.842, meaning that on average, the in-network parameters of employer sponsored plans paid 84.2% of covered charges. Out-of-network plan parameters came in substantially lower, at 0.561, but most people who access out-of-network care actually use a blend of providers.
Unfortunately, for most services, this blend was challenging to capture, with low overall claims for out-of-network providers masking this disparity. We noted that this is an area of concern that cannot be fully captured by traditional quantitative actuarial methods, as ARC found blended (in and out-of-network) actuarial values are very similar to traditional measures of plan richness (considering only in-network benefits). Actuarial values are most affected by plan type (with HMOs not covering out-of-network services other than those mandated) with firm size and sector as additional drivers. Plan funding and premiums had little effect.
A point of emphasis was mental health network usage since there has been considerable concern over network adequacy. Claims data revealed much higher out-of-network usage for mental health and/or substance use disorder (SUD) care when compared to other services, and at lower payment rates.