ObamaCare Is Raising Insurance Costs

Details

Author(s):
Publish Date:
June 4, 2013
Publication Title:
Wall Street Journal
Format:
Op-Ed or Opinion Piece Page(s) A13
Citation(s):
  • Daniel P. Kessler, ObamaCare Is Raising Insurance Costs, Wall Street Journal, June 4, 2013, p. A13.
Related Organization(s):

Abstract

California and Oregon have recently announced the premiums for the health plans that will be offered through their ObamaCare insurance exchanges in 2014. Supporters of the law are jubilant. KQED, northern California’s largest public radio station, reported that “experts had warned of ‘rate shock.’ That has not happened.” The New York Times editorial page chimed in, writing that “For the most part, the premiums will increase only slightly or even decrease for individuals and family coverage on the exchanges.”

A closer examination of these health plans reveals a less rosy picture. Although the premiums are lower than some anticipated, this has been achieved by designing the plans around much more limited provider networks and including greater cost-sharing than the typical commercial health-insurance plan. The premiums for the policies that will be offered on the states’ exchanges are much higher than analogous plans being sold today.

One of the most important feature of any health plan is its “network”—the group of doctors and hospitals that agree to serve the plan’s enrollees. Although the California and Oregon networks are not final, there are indications they will be narrow.

California HealthLine, a service of the California HealthCare Foundation, reports that “some premier provider networks” (such as Cedars-Sinai and UCLA Medical Center) are largely absent from the exchange plans. In Los Angeles County, most of the exchange plans are priced comparably to L.A. Care—the health plan for Medicaid beneficiaries. This suggests that the other exchange plans will have provider networks similar to those that serve Medicaid—networks that have been criticized for giving beneficiaries inferior access to care.