Monday, January 5, 2015

Obamacare’s Emphasis on Acquisition of Coverage Creates Supply Side Problems

"In addition to financial barriers to care, there are non-financial ones – mainly caused by the narrow networks that have emerged in the insurance company race to the bottom. These networks often exclude the best doctors and the best hospitals. A study by Avalere found that there were no cardiologists in the networks of plans offered in Los Angeles. There were no diagnostic radiologists in the networks of plans offered in Chicago. In seven of the nine urban areas, fewer than half of specialists sampled belonged to provider networks in Obamacare exchanges. Patients can be forced to pay 100 percent of the cost of out-of-network services.

Here is another problem: millions of Americans are being forced to switch to the wrong kind of insurance. For example, many employees of fast food restaurants have mini med insurance, which covers the first few thousand dollars of care. These employees tend to be young and healthy and mini med plans pay for primary care – which is about the only care they are likely to need. The Obama administration considers that kind of insurance “under insurance,” however, and the new law insists that people have coverage for catastrophic care, with no annual or life time limits. Yet this kind of “comprehensive coverage” often has very high deductibles – forcing the young and the healthy to pay for primary care out of pocket.

About half the newly insured will get insurance through Medicaid, where there is little or no cost sharing. But here again, there are serious non-financial barriers to care. According to a study by the inspector general of the Department of Health and Human Services about half the doctors who are listed by insurers as serving Medicaid patients are not available to treat them. Those who are available often require long waits:


“For example,” the report said, “a number of obstetricians had wait times of more than one month, and one had wait times of more than two months for an enrollee who was eight weeks pregnant. Such lengthy wait times could result in a pregnant enrollee receiving no prenatal care in the first trimester of pregnancy.”

“Primary care providers, such as family doctors, internists and gynecologists, were less likely to offer appointments than specialists, the report said. But specialists tended to have longer wait times, with a median wait of 20 days, compared with 10 days for a primary care provider.”

These problems will almost certainly get worse in January when an end comes to a special Obamacare subsidy that has been enhancing the fees of Medicaid doctors for the last two years. According to the Washington Post:

“A study … from the nonpartisan Urban Institute estimated fee reductions will average about 40 percent nationwide. But they could reach 50 percent or more for primary care doctors in California, New York, New Jersey, and Illinois — big states that have all expanded Medicaid under the health law.

A system-wide problem will add to these woes: we are about to experience a severe rationing problem. If the economic studies are correct, the newly insured will try to consume twice as much health care once they have insurance and there may eventually be 25 million of them. Along the way almost everyone else is being forced to have more generous insurance than they previously had and with these new benefits they are likely to seek more care. The result: we are in the process of greatly expanding the demand for care while doing virtually nothing about supply.’ - Is Obamacare Working? John Goodman, Forbes, 12/15/2014

Link to the entire article appears below:


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