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  • Side Effects: Obamacare Encouraging Insurers to Cut Corners

    With or without Obamacare, health insurance costs are on the rise.  And that has businesses searching for more affordable options.

    One increasingly popular option: health plans covering services provided by a relatively small number of participating doctors and hospitals.  These plans are most attractive to small employers, but The New York Times reports, “Large employers, as well, are starting to show some interest, and insurers and consultants expect that, over time, businesses of all sizes will gravitate toward these plans in an effort to cut costs.”

    So what’s the problem?  Less expensive options to choose from are a good thing, though the Times points out that plans such as these “could come as a surprise to many who remember the repeated assurances from President Obama and other officials that consumers would retain a variety of health-care choices.”

    But as Obamacare takes effect, more Americans could end up with plans that restrict their access to care due to provisions that raise premiums.  Under the new law, the federal government will dictate what benefits health plans must offer.  The more generous the required benefits package, the higher insurers will have to hike premiums.

    Obamacare also alters public health programs in ways that drive private sector premiums higher.  Expanding Medicaid means doctors will be treating more patients at Medicaid’s below-market rates.  To cover their losses on Medicaid patients, physicians will have to charge their privately-insured patients even more.  As the Times explains, “Even large employers, worried that the new law will result in higher prices for care as government programs pay less, are reconsidering their earlier stance.”

    As Obamacare ratchets up premium prices, insurers and employers will step up their search for savings.  Further restricting provider networks is one way to do this.  But, as the Times reports, “some benefits consultants wonder if these plans represent any real solution to high medical costs. The narrow network, if it is based on the insurers’ ability to demand low prices, may be ‘just another short-term fix,’ warned Barry Schilmeister, a consultant at Mercer.”

    Reduced costs don’t necessarily mean better value.  In this case, Americans will pay less but will also receive less.  Real reform would lower costs while maintaining Americans’ access to the best doctors the world can offer.

    Posted in Obamacare [slideshow_deploy]

    16 Responses to Side Effects: Obamacare Encouraging Insurers to Cut Corners

    1. billie says:

      the government has to stop interfering in the matters of private businesses, PERIOD. We need a market free from outrageous, bias, unfair governing, so we can live the personal responsibilities we were born as human beings to live and the individual right to do for ourselves! Obama got everything he wanted and all he promised, failed to come to be in favor of the people.

    2. West Texan says:

      What bothers me most about conservative think tanks such as HF is playing the Obamacare game of cost and service comparisons with private sector coverage. This adds legitimacy to such arrogantly socialist legislation. Your analysis is greatly appreciated but it hides the main problem of Obamacare's unconstitutional overreach into states' affairs. I'd much rather see the focus where it justifiably belongs. Just the same, thanks for all you do informing Americans of these important issues.

    3. Brad, Chicago says:

      Could we really not find a better source than Barry "Schil-meister"? That's hilarious!

      …and the President and all of his horses and all of his men will call the doctors -that restrict Medicaid patients from their practices – and the insurance companies – that try to maintain some profit so they can continue employing the tens of thousands of people I'm sure they employ – greedy, insensitive, and/or plain evil.

    4. lynn, Richmond, VA says:

      Restricting the network will cause huge delays in getting an appointment with the doctor. Some plans already have a limited number of specialist such as dermatologist, and the wait can be up to 9 months for an appointment.

      Reduced cost for less value may even be acceptable, but look for increased cost for less value.

    5. Prudie Potter, Annan says:

      I'm sick of this president and his agendas. Give me my old insurance, and Government, Stay Out!

    6. West Texan says:

      Brandon,

      My initial comment reflects impatience with the current democrat majority and their totally backward and outlandish priorities. For this reason, a sincere apology for any offense possibly taken. I'm aware of HF's excellent job at covering the unconstitutional aspects of Obamacare. My message was not to belittle that effort. I also know HF has a far greater and more realistic grasp of Beltway machinations and how best to address same. I was simply pleading for more focus on the federal power abuses by such figures as Woodrow, FDR, et al. Team Obama is simply the cherry on top. Your informative links are appreciated.

      Thank you,

      wt

      • Brandon Stewart Brandon Stewart says:

        @West Texan No offense taken at all. We just put out a lot of information and wanted to make sure you knew we had covered that angle as well. But you raise a good point in that if it's unconstitutional, little else matters!

    7. Lloyd Scallan (New O says:

      Can no one not see it? This is the first step to total government controlled health

      care. Exactly what Obama said he would not do. Their is absolutely nothing

      Obama will not lie about. Obama is dishonest to the core. He has an agenda and will say or do anything to get this agenda shoved down our throats.

    8. Renny. Middle River, says:

      Now that this is comming down the track and no one can stop it why keep talking about a negative. It's like beating a dead dog!! You can't impeach and you can't go to the courts because they are on the chicago gangs side!! It's very sad "we" have allowed this to happen to our society and it's because of our selfishness and lack of concern!!! God have mercy on us and our children!!

    9. West Texan says:

      Why wait for the next U.S. Congress to repeal Obamacare. Our Texas Legislature, just like Virginia's, reserves every right to nullify this abomination due to its horrendous overreach into their rightful domain.

    10. Susan M. Noegel says:

      I am just starting Medicare. I am not 62 or older, but because of a disability I am enrolled in SSDisability. The money that I get monthly will now be reduced to take care of Part B. I do not know if I can handle it all. I had to take out Part D with a Medicare approved plan which I will also have to pay for. I have not scheduled to have it taken out of my social security payments. It will be done with coupons? I do not know how that will work? Should I have taken out of my Social Security instead?

      Susan M. Noegel

    11. Sadie, Pa. says:

      You get what you 'vote' for.

      Health care reform coupled with Financial Regulation reform will dictate the costs to the provider and the consumer. It will lower the living and dying standards of America to a third world country, which was the goal of the 'social progressives' all along.

      The larger issue is that the voter has no input on legislation. Unless and until there are national referendums on major legislation, we are stuck with whom we elected to make decisions. The politician can promise you the world and deliver dirt without recourse until the next election cycle, which obviously is too late.

      We need to address this loophole and quickly.

    12. Pingback: Side Effects: Obamacare Encouraging Insurers to Cut Corners «

    13. West Texan says:

      Sadie,

      Liberal progressives operate in a two dimensional cartoon world. You'll spoil their fantasy Kool-aid if you're any different. That's why they work so hard forcing their out-of-touch ideology at the point of their activist pitch forks. You will cooperate by living just like them or else! These hairy toed creatures could benefit by getting their hands dirty in something like work. The poor hygiene stuff just doesn't cut it. And the minds of over those educated liberals, not to be confused with intelligence, are creepy places full of cob webs and self generated demons. There's no saving them from their own heads. All you can do is defend yourself from their liberal rampage.

    14. joan frost, north te says:

      A novel idea perhaps ,but how about a" Pilot Program" of actually enforcing existing Immigration law and observing the cost savings to state tax payer funded medical programs and overburdened hospital emergency rooms that would result by eliminating illegal alien utilization. If Arizona is actually allowed to unburden itself by the federal courts , we may have a "teachable moment".

    15. LARRY PENNSYLVANIA says:

      NEXT THING YOU KNOW OBAMA AND THE DEMS. WILL HAVE THE OLD AND SICK PEOPLE WALK INTO GAS CHAMBERS!

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