New York Might Drive Its ObamaCare Exchange Premiums Up Another 30 Percent
According to the U.S. Department of Health & Human Services’ March enrollment report, New York’s state-run ObamaCare exchange has signed up fewer than half the people who were determined eligible for the exchange when they enquired.
What is the problem? One seems to be that the provider networks available in the exchange are very narrow.
What the proposed solution? At a recent presentation, exchange officials threatened to impose out-of-network access requirement on insurers who bid to participate in the exchange. If rolled out in the direction the officials appeared to point, this would be an Any Willing Provider (AWP) provision, long a lobbying priority for organized medicine:
The lack of out-of-network benefits for individuals shopping on the exchange has been criticized by some business leaders, physicians and legislators, who say it provides little choice for consumers and hurts doctors who can be bullied by insurers into accepting lower reimbursements. Insurance executives say they need that leverage to keep premiums low and attractive to consumers shopping on the exchange…If out-of-network doctors and hospitals were required to be reimbursed by the insurer, premiums could rise as much as 30 percent, according to the insurance industry.
This blog is not a fan of health insurers’ provider networks, as currently structured. Nevertheless, there is no doubt that the change proposed in New York would drive up costs dramatically. As noted in a previous blog, a simple model of health insurance allows insurers control of three variables: Premiums, benefits, and access to providers. Under ObamaCare, the government determines benefits, and insurers compete by (unsuccessfully) seeking to enroll younger, healthier beneficiaries. So, they limit access to providers to keep premiums low.
It’s hard to imagine health insurance in New York could become less affordable, but state officials might make it so.
Not only does State officials are trying to make healthcare less affordable, but they are driving away young consumers. This measure is the antithesis of Obamacare, less affordable coverage and more people uninsured. If the cost of insurance in New York State is high, I don’t want to imagine how much it will cost when this measure is approved and drives the prices 30 percent higher. I would rather be uninsured and pay the fine than to pay for insurance that is going to take up a great portion of my budget.
Young individuals especially cannot afford anymore increases in their health premiums. They are generally underemployed, battling student loans, and now burden with ObamaCare’s plans. An increase in health premiums could bring them underwater.
I wonder how the government plans on promoting economic growth when its citizens do not have any money to help spur the growth.
By borrowing and spending more and more money.
I agree whether young or old Americans can’t afford it. But if this is the only way due to lack of those signing up I’m sure they will have to deal with it anyway. Many of those peoples everyday budget will take a big hit.
“If out-of-network doctors and hospitals were required to be reimbursed by the insurer, premiums could rise as much as 30 percent, according to the insurance industry.”
As if premiums weren’t already high enough, a 30 percent increase would be very considerable and most likely unaffordable. Especially in 2015 as network plans become wider, which naturally will drive up premium costs.
Enrollment in March for the NY state exchange was depressingly low. It is interesting to see that even states that supported Obamacare do not trust the program. It seems that the people from that state thought they knew what is best for everybody else but not for them.
http://www.nytimes.com/2013/12/14/nyregion/with-affordable-care-act-canceled-policies-for-new-york-professionals.html?_r=0
Check out this article. The same people who supported ObamaCare in New York are now the victims of ObamaCare. Misinformation can cause a great deal of confusion.
If I were in a position of power in one of the big insurance companies I would consider closing my operations in such state. The good thing about these corporations is that they have leverage. If the new law makes operations of that state unprofitable, just leave. That will force citizens to pressure the politicians to pass legislation that will welcome back insurance companies.
“A simple model of health insurance allows insurers control of three variables: Premiums, benefits, and access to providers. Under ObamaCare, the government determines benefits, and insurers compete by (unsuccessfully) seeking to enroll younger, healthier beneficiaries. So, they limit access to providers to keep premiums low.”
This is such a simple, easy-to-understand message if anyone takes the time to think about it. The GOP should be able to hammer this point home to voters – explaining why this law hurts your ability to see the doctor of your choice.
Narrow networks allow insurers to negotiate better prices with select providers. However, in an experiment in California, CalPERS (a pension plan) and Wellpoint (an insurer) didn’t rely on a narrow network. Rather, in an experiment on hip replacement, enrollees were told they could go anywhere, but if they went to hospitals that charged more than $30,000, they would suffer 20% cost sharing on $30,000 and 100% of the cost in excess of $30,000. In other words, having a procedures done at a hospital that charged $40,000 would subject a retiree to a $16,000 co-payment ($6,000+$10,000). Doctors and hospitals were also conveyed the same message. Within a year, the hospitals that had previously charged more matched the $30,000 price point. Rather than tell patients where they had to go, the health plan made it in each patients self-interest to choose a hospital.
That’s the wonders of a free market. Prices will adjust to reflect the supply and demand for the particular good. Let’s hope that this option expands throughout the country.
When I first read the article, I was baffled by the sentence “if insurers had to reimburse out of network hospitals, costs would increase.”
What I think this really meant was “if insurers had to reimbure out of network at the rates charged by out of network hospitals, costs would increase.”
Apparently a lot of dim witted insurance conpanies still pay a percent of charges, rather than have a fixed fee schedule like 150% of Medicare or the program described by Devon above.
If a network hospital is reimbursed $20,000 for angioplasty, and the patient goes to Cedars of Lebanon instead, do insurance companies really pay Cedars of Lebanon $50,000 just because Cedars of Lebanon charges $100,000 for the same surgery?
What the country needs is more insurers like the ones Devon described. The country perhaps needs something close to what Medicare calls ‘mandatory assignment’…i.e. when the insurance company pays the claim according to its published fee schedule, that’s it for the hospital. If they do not like that, they can refuse patients with the insurance in question.
I agree whether young or old Americans can’t afford it. But if this is the only way due to lack of those signing up I’m sure they will have to deal with it anyway. Many of those peoples everyday budget will take a big hit.