The new Obamacare policy will not be better if doctors refuse to take you as a patient. But many doctors will refuse to take you as a patient if the fees paid them under the Obamacare policy are lower than those paid by other private insurance policies.
This is exactly what happened in Massachusetts with Romneycare. Fees paid to doctors under the state subsidized policies only pay about 10% more than Medicaid, so doctors have every reason to avoid these patients.
It is not clear yet how much the Obamacare policies will pay on average, but noted medical care analyst John Goodman has already cited what he calls a “race to the bottom” in Obamacare policies, which are often constructed either to restrict access to a limited number of doctors or to reduce fees paid to the doctors.
Restricting access means that you may have to find a new doctor. But finding a new doctor may become increasingly difficult because the network will be swamped with people wanting to sign up. If, in addition, the fees paid are low, persuading a doctor to take you may become impossible.
Note that Obamacare regulates what is covered in a policy, but not the doctors or hospitals included in the network or the fees paid. Proponents of Obamacare claim that the new exchanges will promote competition. But since services provided and many prices are fixed by law, insurers look for sneaky ways to keep profits intact, in particular by restricting the network and paying doctors less.
With a little digging, the mainstream media could discover that Obamacare exchange policies will pay doctors less, but so far this inconvenient fact is being ignored.
Obamacare is of course nothing like a normal market. In a normal market, sellers compete on both quality and price to attract buyers. But Obamacare was born in closed-door meetings with special interests in the White House, and everyone from the start has been trying to game the system in every way they can.
Why is it that insurers are excluding some hospital systems and including others? In some cases, it is because they regard the hospital system as too expensive. But just as often, it is because the hospital system attracts sicker people.
In a normal market, insurers would simply charge more to cover sicker people. But since Obamacare forbids that, other more devious means are devised. Ironically, because the poor may need more medical services on average than others, this means that insurers will do everything they can to avoid them as customers.
As Daniel R. Dawkins, senior vice president of the National Association of Community Health Centers, which includes 9,000 clinics, said earlier this year to the New York Times: “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.”
So far, the story about Obamacare has been a non-functioning marketplace; sticker shock on many policies, especially for the young; millions of people losing their old policies and doctors without knowing where they will go; and millions more stuffed into a Medicaid system that doctors avoid and states keep cutting.
The Obama administration and many commentators have responded that, yes, people will lose existing policies, but the new policies will be better. This latest lie may linger for a long time, because the network restrictions and doctor fee reductions will take a while to play out. But at some point, the truth will once again become impossible to deny.
Hunter Lewis is author of two new books, Free Prices Now!, about the Fed, and Crony Capitalism in American 2008-12. He is also the co-founder of againstcronycapitalism.org and of global investment firm Cambridge Associates.