Pressure on Insurers to Add More Doctors and Hospitals Under Obamacare – Who Couldn’t See This Coming?

Pressure on Insurers to Add More Doctors and Hospitals Under Obamacare – Who Couldn’t See This Coming?

As reported in a recent article in the Wall Street Journal, politicians and regulators are dealing with the latest Obamacare debacle by pressuring insurers to add more doctors and hospitals to their networks in 2015.

This was an eminently predictable development, and fits logically into the sequential steps of this unfolding catastrophe:

1 – The Affordable Care Act (ACA) sets coverage requirements that must be present in all plans, regardless of the consumer (obstetrics for a single man, etc.). This drives up costs.

2 – The insurers are forbidden to sell policies across state lines. Dealing with individual state regulations, on top of the federal requirements, again drives up costs.

3 – To be approved by the government to participate in the Federal Exchanges, pressure is put on the insurance companies to keep rates down. Not surprisingly, some insurers have decided not to participate in certain states.

4 – One way to keep rates down (while costs are rising) is to establish a more limited network of doctors and hospitals that will agree to accept lower reimbursement rates. The top doctors and hospitals are in great demand, so they decline to be included in the networks. As in all consumer markets, you get what you pay for.

5 – Consumers push back. Apparently you cannot keep your doctor if you want to. The political and regulatory class now puts pressure on the insurance companies to add back those doctors — but don’t look for much rate relief from the powers that be.

6 – The private medical insurance industry simply cannot sustain itself under these pressures. Insurers first merge, then eventually start to fail.

7 – The government steps in, as the insurer of last resort. Single payer at last!

All of this is unfolding step by step, and should have been clear to the Democratic politicians who (alone) passed this legislation. Now they are trying to rectify things on the fly, as these unintended consequences surface in such predictable fashion. I guess Nancy Pelosi was right — we did have to pass the law to find out what’s in it. Now we have, and it isn’t pretty.

Somehow, this needs to be stopped. But how?

President Obama will certainly not admit that his signature achievement is flawed. Congress has shown a total inability to think this through, and act clearly in the national interest. Now I’m not a lawyer, but it seems to me that the only way to force change is for one of the large insurance companies to sue in federal court — not over the mandate (been there, done that), but on the basis of restraint of trade.

The lawsuit should seek that the ACA be held unconstitutional because it violates the laws of fair trade. Companies in our capitalistic society should be free to design their products, set their prices, operate across state lines, and responsively serve the consumer — and they will surely serve the consumer, in a way that makes sense for both sides of the bargain. There are a lot of televisions to fit a lot of budgets, and this is really no different.

For the poor who truly need help, a voucher system is easily workable — let’s replace Medicaid with a flexible system that affords all people the ability to purchase health insurance. We do it for home heating oil, and we can do it for medical coverage. Where there is a will, there surely is a way.

But somebody needs to lead the charge, alone or as a group. Where are you Aetna, United HealthCare, and your fellow insurers? Take up the torch. Be forceful. Stop this madness.