Why You Will See Fewer Doctor Choices Under Obamacare — Real Health Care Reform Healthshare

Why You Will See Fewer Doctor Choices Under Obamacare

health insuranceAs I’ve discussed before, the Affordable Care Act is going to (perhaps ironically) cause health insurance to become less affordable for most people.  One way insurance companies may try to counteract these rising costs is by narrowing the number of available doctors and hospitals that policyholders can use.

 

Return of the HMO

 

In the 1980s, Health Maintenance Organizations, or HMOs, were promoted as a way to keep rising health costs under control.  The way they attempted to do this was to require policyholders to go to a primary care physician first, before they could see any specialist.  Only when the primary care physician approved a visit to a specific specialist, would the care be covered under the policy.

 

The primary way the HMO tried to reduce expenses was by limiting coverage, and allowing policyholders to only see a small set of physicians that had contracted with the HMO.  As you can imagine, most of these plans became highly unpopular as people had to jump through hoops to get their health care.

 

With the full implementation of the health care reform law in 2014, these narrow networks are coming back.

 

Why Networks Will Be Smaller

 

Starting in 2014, everyone who does not have a grandfathered health insurance plan that went into effect before Obama signed the act into law March 2010 will have to switch to a new government-approved plan.  And, it looks like most of the PPO networks will be much smaller than those currently available to most policyholders.

 

As you can imagine, the reason smaller networks save insurance companies money is because the companies contract with the least expensive providers.  So, as a policyholder, if you have a major or complicated health situation, you may end up not being able to see the physicians that may offer you the best chance of a successful outcome.

 

Another reason carriers will be offering less attractive networks is because they will want to discourage the most unhealthy applicants for applying for coverage.  Starting in 2014, anyone can purchase health insurance, regardless of pre-existing conditions.  An insurance company trying to avoid business is one of the perverse consequences of this misguided law.

 

What This Means to You

If you are one of the millions of people that will be forced to choose a new plan in 2014, in addition to your new premium, you should make sure your physician is in the network, and then look at the size of the network itself.  The plans with the most narrow networks are likely to be least expensive, but balance the money saved against the increased risk you’ll face in a smaller network.

 

The reason I carry health insurance is to protect against the major unexpected health situations that can wipe out my savings.  I’m not too worried about paying for checkups.  If something major does happen, I want to be able to go to the best doctors out there.

 

This may not be possible even in the best networks, which is why I’m happy to have a sizable savings built up in my Health Savings Account.   But, I’m still going to be looking very closely at any changes in the PPO network I have access to as I move into 2014.

 

For all clients of HSA for America, we’ll be sharing detailed information about network availability as that information becomes available.

 

4 thoughts on “Why You Will See Fewer Doctor Choices Under Obamacare”

  1. sharon bailey says:

    Dear Mr. Long,

    My family and I also have a good amount saved in our HSA. This should be available for all citizens, it is our money and makes us responsible for using the funds wisely and motivating us to stay healthy.
    Is it true that we will be restricted to only contributing $2500 in 2014 instead of the $5000+ that we have been contributing?
    If true, it appears that OBama and ObamaCare would make us more dependent on government. We are therefore being punished for trying to be self reliant. Of course the extra money not saved tax free will help fund this horrible new law, ObamaCare.
    I have written to my U.S. Senators in Texas asking them to initiate a bill to ensure that we can still contribute to our HSA in the same way before ObamaCare became legal and a greedy taxing law.

    Thank you, and please keep informing the public about Health Care in the U.S.

    Sincerely,
    Sharon and Bob Bailey

  2. Wiley Long says:

    Hi Sharon and Bob,

    No, in 2014 you will be allowed to contribute $3300 as an individual, or $6550 as a family. Anyone over 55 can contribute an additional $1000 (if both partners are over 55, you’ll have to open a second account for the additional $1000 contribution). So fortunately, you can still make your full contribution.

    HSA plans reward personal responsibility by giving people a tax incentive to safe money to cover future medical expenses. They also encourage people to price compare when shopping for medical services, which in turn encourages competition and price transparency among providers.

    However, premiums will be going up, particularly on those who do not get a subsidy. Most policyholders will be required to switch to a richer-benefit plan. Forcing people to purchase more coverage than they really want is not the way to lower medical costs.

    Instead, higher deductibles and contribution limits should be allowed, encouraging even more people to put aside money to pay for future medical expenses. (After all, the financial future of Medicare is shaky at the moment itself.)

  3. jon says:

    Hello,

    I have only “unearned income” – perhaps too much of it. My wife and I will pay 3-4 times the “Obamacare Medicare tax” (3.8% of unearned income) in any given tax year- than any HSA contribution can be ($7550. for a couple over 55).

    As we have only unearned income, we will be only able to get the new highly restricted coverage with much smaller provider networks. We would be willing to pay a lot more for a larger network, but all we are allowed to do is buy the same coverage as everyone else. Obama has set up a one size fits all system! Therefore there is affordable – but no choice. Everyone gets bad coverage. All we get to do is pay a hefty potion of extra “Obamacare Medicare tax” to pay for subsidizing the coverage of others.

    Ten years of HSA payments would add up to roughly $75,000. With today’s medicine for cash prices – this wouldn’t even pay for half a hip replacement. I’m not sure this would help anyone unless you started paying at age 20. Back then, no one would have ever expected what we face today.

    Thank you for pointing out this deficiency in the new Obamacare plans. You are the only person on the Internet I have seen to point this problem out. People are going to be surprised come October 1. It would take tens of millions in the bank to get health care by good doctors from January 1 on. Not many people have that kind of money. Yes, now everyone will (supposedly) be able to afford coverage – at the price of poor coverage for any price. What was Congress and Obama thinking when they passed this law?

  4. Wiley Long says:

    Jon,

    You make an excellent point. Contribution limits for an HSA should be much higher, and HSAs should really be available to anyone who wants to set one up. The more people who have money available in an HSA to pay for medical services, the better it will work and the less expensive it will be for those who choose to or are forced to go to concierge or cash-only medical care.

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