Your Obamacare Plan May Not Be What You Expect
Megan McArdle talks about what health insurance might look like under the Obamacare health care exchanges. First, she quotes Aaron Carroll.
My conversations lead me to believe that many people are expecting that the plans offered in the exchanges will be Medicare-like in many ways. I feel like many people think they will have choice of doctor, choice of hospital, and the ability to dictate care. I'm not seeing how insurance companies will be able to offer such products at prices people can afford. As I talk to more and more people in the insurance industry, my thoughts seem confirmed.
Why does Aaron believe that?
For instance, we just told millions of people that they can go to the exchanges in 2014 and buy insurance. There won't be any lifetime or annual limits. There won't be denials for pre-existing conditions. There won't be any surcharges for having such conditions. And it's going to be "reasonably" priced.
I asked what insurance companies might offer under those conditions. After all, if it were really that easy to offer comprehensive insurance at a real discount, someone would already do it.
McArdle believes these exchanges will look pretty horrible by the time they actually roll around in 2014.
What people are expecting seems to be a very expensive form of insurance (no gatekeepers or restrictions) on the cheap. What they're going to get is cheap insurance that they will be forced to buy. Moreover, a significant number of workers are going to be dropped from their employer plans and dumped on the exchanges. An even more significant number of workers are going to be shunted onto Medicaid (as I understand it, if you're eligible for Medicaid under the new rules, you have to go into Medicaid, even if you want to buy insurance through the exchanges instead).
Medicaid is even more terrible than whatever stripped down products end up being offered on the exchanges, especially since providers hate taking it. There's been some attempt to alleviate this problem with a temporary boost to Medicaid reimbursement rates, but this will expire, leaving Medicaid patients with the same problem they have now in most states: a small number of providers willing to accept its paltry reimbursements. With millions of new Medicaid patients on the rolls, this problem is going to get worse.
Obamacare delenda est. Because what you get with Obamacare probably isn't going to be anything that you'll actually like.