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ObamaCare clusterfuck: Putting less cereal in the box, while leaving the size of the box the same

That's an old, familiar way to keep profits high, or raise prices without anybody noticing; people who don't read the fine print and check the weight think they're getting the same value for
a "box of cereal" when they're not. Candy manufacturers use the same play: They shrink the size of the bar, and leave the size of the wrapper the same.

And so, to ObamaCare. ObamaCare apologists consistently make the argument that ObamaCare is "affordable" because the prices are low* or at least not too high, but they always talk about price and not about value.** And they can't talk about value because ObamaCare's insurance policies have not yet been revealed! In any case, the value story isn't looking good for ObamaCare's Exchanges:

WASHINGTON — 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.

“That can be positive for consumers if it holds down premiums and drives people to higher-quality providers,” [Adam M. Linker, a health policy analyst at the North Carolina Justice Center, a statewide advocacy group] said. “But there is also a risk because, under some health plans, consumers can end up with astronomical costs if they go to providers outside the network.”

If I were the super-paranoid and cynical type, I'd feel like I were being lured into the trap by the cheese of low price, only to have the jaws of poor value close on me later.

Somebody who really knows about how insurance companies can tell me whether this scenario makes sense. Let's use North Carolina as an example:

1. North Carolina has a long history with the textile industry.

2. One of the well known occupational hazards of the textile trade is byssinosis, "brown lung," from exposure to cotton dust.

3. And assume that byssinosis is a chronic disease that is costly to treat (where, from a profit-maximizing perspective, any cost is costly).

Let's postulate that a profit-making entity -- Health Insurance Parasites, Inc. -- is building a "thin plan" for North Carolina in a textile industry.

3. Hospital A has a nationally recognized byssinosis program, and Hospital B does not.

So, which hospital does HIP, Inc. include within the "narrow network" of its thin plan?

I say Hospital B, meaning the byssinosis costs get shoved onto the patient or some other third party because they're not "in network" (Medicaid, I would imagine, after the house is sold). Note that I'm sure that Big Data makes "medical gerrymandering" like this quite easy.

Readers, is this logic plausible? Do you have any evidence for it?

Oh, and notice the beauty part: You're still paying money for insurance and then not getting care. Business as usual!

NOTE * I'm betting that counterexamples from FL and OH are politically engineered.

NOTE ** Yes, I know about kids on their parents policies until 26, and I know about coverage of pre-existing conditions and the prohibition of rescission. The former is a minor fix that doesn't require the elaborate Rube Goldberg device of ObamaCare at all. You don't need exchanges to put kids on their parents policies! The latter we'll just have to wait on, but for my money it's going to come down to how the insurance companies game the regulations. After all, the profit motive, which incentivizes them to do so, still remains.

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jo6pac's picture
Submitted by jo6pac on

received my Medi Care card the other day now if I can stay healthy until Dec. 1 I might a fighting chance to make to 80 or so. Then again that depends on 0 not so grand bargain and cuts to Medi Care.

Thanks for the update

nihil obstet's picture
Submitted by nihil obstet on

No, I don't think the logic is plausible. I'm pretty sure networks are developed by insurance companies based primarily on price. Insurance works on big bad obstructionism, not finely detailed matching patient to highly rated specialty hospitals.

My concern would be whether there's a medical provider within reasonable geographic distance. If, for example, you need an eye surgeon, but the nearest one is 75 miles away, and you're poor, without transportation. The system of county transportation for medical needs (such as regular dialysis) used to be pretty good, but it got privatized after conservatives took over the legislature, and there have been absolutely horrific reports lately. The networks could exacerbate that.

Rainbow Girl's picture
Submitted by Rainbow Girl on

My sense is that PPACA does not require the exchanges to provide an affordable (for some meaning of "affordable") plan that includes out of network coverage. (*) This is because Insurers drafted the PPACA. From personal experience and those of others I know, if you have a policy that has some kind of reimbursement for out of network, the insurer (1) games the reimbursement by having a secret schedule of "allowable costs" (which you only find out about *after* seeing the out of network provider and usually learn that the "allowable rate" is at or less than Medicaid) and (2) the piece of paper they send you stating how much (actually, how *little*) the company pays for out of network care always has this annoying "notice" that "you can keep your costs down by using in-network doctors" -- never mind that the policy-holder is paying *extra* (i.e. a *premium*) on the monthly premium and with separate deductibles precisely to purchase the advertised out of network services!

Shorter: Insurers HATE policy holders who use out of network providers even if they're selling policies that charge more for said out of network type care.

So ... my prediction is that ObamaCare X-change Policies (Junk) will be skinny plans that barely (or don't) cover the needs of many of those who will be shanghaied into buying these things. And by the way, I believe that Medicaid's "network" ain't the cat's pajamas either -- not sure, therefore, that Medicaid is a "plan B" for someone with a Junk Obama Policy who can't get care for the textile-work-induced injuries at Hospital A in oyur example.

I hate all of this so much. Here we have brutal cruelty by a President against his citizens, and it's crickets from everyone in the Democratic Legacy Stables (politicians and media) who pretend to "care about people" and "care about jobs." Well, at least the NYT is covering the skinny-(or no)-value aspect of the ObamaCare scam. I guess that's progress.

(*) See transcript I poseted couple of weeks ago of a friend's "chat" with Health.Gov re whether PPACA requires exchanges to provide policies with out of network coverage. After much avoidance-replies, a general statement about "all sorts of things will be provided" (e.g., PPO plans, which means you can pick your own doctor) but in the passive tense, meaning that PPACA may not require same but there's some chance (in the arbitrary world of ObamaCare) that some state exchange might provide such a policy in some county.

Rainbow Girl's picture
Submitted by Rainbow Girl on

“Some insurers do not want those patients who, for medical reasons, require a broad network of providers.”

Well, of course. That's how insurance companies can pay lavish CEO salaries and big dividends to stockholders and bondholders. Insurance Companies are Rational Economic Actors.

So Obama, remind me again how exactly your signature law putting Insurance Companies in charge of setting the prices and level of care for Americans (that would be the PPACA) was supposed to lead to health care for the people who are having a hard time getting it, for example, people who are ill and require complex medical care?

Sorry, I can't hear you. Oh right, that's because your signature law was designed to deny even more americans affordable health care. I would be quiet too, if I were you.

Rainbow Girl's picture
Submitted by Rainbow Girl on

Once again, in a rare moment of MSM covering ObamaCare with less than total adulation -- all the references to "affordability" -- in this case, how insurers are carving out Skinny Networks to provide "cheaper" policies -- have to do with PREMIUM COSTS. So, taking any of the talking heads (and, God help me, the numerous ObamaTroll Comments) cited in the article on the relative "cheapness" of Obama Exchange Products, it's all about the (projected, of course, because even premium prices remain Mystery Door Number 3 at this point) premium prices -- no meaningful mention of how Premium Costs are just the FIRST element of the financial burden of these Exchange Products, and that on top of that FIRST layer of costs, you have to add whatever the DEDUCTIBLE(s) will be, what's not covered (100% out of network) the "cost sharing" if a thing is covered and you've paid the whole deductible (30% with "Silver" Products!), etc.

This to me is profoundly dishonest on the part of the media. The upfront costs of Obama Exchange Products are: monthly premium + deductible (potentially more than one) + co-pay if care is covered (40% Bronze, 30% Silver), and then all of the 100% out of pocket AFTER the deductible if what you need is "not covered."

Sorry, but if Ford was advertising a Focus for $10,000 in the Sunday Paper and then when you got to the dealership you learned there were "charges and fees" that added 50%, 60% or even 300% to the advertised cost, that would be consumer fraud and the dealership would get fined and/or shut down.

I've said it before and I believe it more and more: ObamaCare is a giant consumer fraud scheme targeting the US citizens who are most financially vulnerable (and medically in need) but that is disguised as a "helping hand program. Nice.

Submitted by hipparchia on

first off, "high value" is insurance-speak for "doesn't cost the insurance company very much money." no i'm not being snarky here.

your byssinosis example is almost on the money. from pnhp's copy of the same article:

In California, the statewide Blue Shield plan has developed a network specifically for consumers shopping in the insurance exchange. Juan Carlos Davila, an executive vice president of Blue Shield of California… said the new network did not include the five medical centers of the University of California or the Cedars-Sinai Medical Center near Beverly Hills.

Daniel R. Hawkins Jr., a senior vice president of the National Association of Community Health Centers, which represents 9,000 clinics around the country, said: “We serve the very population that will gain coverage — low-income, working class uninsured people. But insurers have shown little interest in including us in their provider networks.”

Dr. Bruce Siegel, the president of America’s Essential Hospitals, formerly known as the National Association of Public Hospitals and Health Systems, said insurers were telling his members: “We don’t want you in our network. We are worried about having your patients, who are sick and have complicated conditions.”

these are all the places that treat the poorest and the sickest patients, so what's really happening here is that any hospital, clinic, or other provider (academic medical centers, public hospitals, and community clinics) that is likely to treat large numbers of very sick (read: very expensive) patients is being left out of these networks. mostly only relatively healthy people are going to go for these policies.

this is a win-win-win all the way around - for everyone except sick people and the providers who care for them of course. the obama administration gets to tout the low premiums!, individuals and organizations who supported and/or still support obamacare get to tout the low premiums!, and the insurance companies have once again gamed the system in order to provide insurance to only those who are unlikely to actually use it.

i'm guessing that the primary motivation here is selling insurance to healthy people (because that is how insurance companies roll), and that the secondary effects of killing off both a few more poor people and a few more public institutions (academic medical centers are often associated with public universities and community clinics are often publicly run, and we don't have all that many public hospitals left already) is just gravy.

Splashoil's picture
Submitted by Splashoil on

Does PK thus endorse the 55+ Medicaid clawback and the exclusion of TH non-profits from the "exchanges" and subsidies too? Swiss my ass. Is that the best he can do?
Thanks for all your posts. Feels like rain out here in the coastal temperate zone.