Acknowledged: Lower Prices Mean Less Healthcare Product

The New York Times is finally acknowledging reality:

“Federal officials often say that health insurance will cost consumers less than expected under President Obama’s health care law. But they rarely mention one big reason: many insurers are significantly limiting the choices of doctors and hospitals available to consumers. From California to Illinois to New Hampshire, and in many states in between, insurers are driving down premiums by restricting the number of providers who will treat patients in their new health plans… To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers.”

The whole article is great but here are a couple of things that deserve special mention.

The article quotes Adam Linker who, we are told, is “a health policy analyst at the North Carolina Justice Center, a statewide advocacy group.” He claims limiting options “can be positive for consumers if it holds down premiums and drives people to higher-quality providers.” He might as well have said that limiting options “can be positive for consumers if pigs fly.” Higher quality providers are the ones who charge more. Since it is already admitted that “health care providers will, in many cases, be paid less,” we know that this will tend to push patients toward lower quality health care providers.

But Linker also revealed a frightening fact. There is a risk that, “under some health plans, consumers can end up with astronomical costs if they go to providers outside the network.” By allowing fewer options, specialists will often not be included in the network. So coverage will be promised but, in fact, those who need it will be paying huge prices. In fact, a bombshell is dropped at the end of the article:

“Even though insurers will be forbidden to discriminate against people with pre-existing conditions, they could subtly discourage the enrollment of sicker patients by limiting the size of their provider networks. ‘If a health plan has a narrow network that excludes many doctors, that may shoo away patients with expensive pre-existing conditions who have established relationships with doctors,’ said Mark E. Rust, the chairman of the national health care practice at Barnes & Thornburg, a law firm. ‘Some insurers do not want those patients who, for medical reasons, require a broad network of providers.’”

Rust personalizes the issue by saying “insurers do not want those patients.” The truth is they can’t afford them.

The problem is worse that the New York Times admits. If Obamacare “succeeds” so that millions sign up for these smaller insurance networks, then there won’t be enough healthcare to meet customer needs. People will find they have to schedule medical appointments weeks or months in advance. This too will drive more patients to emergency rooms and to other providers outside their network where they will be paying plenty in addition to their premiums for non-coverage.

Obama is fighting economics and economics is winning. But we are all losing.