This is the big unexploded landmine in the ObamaCare mine field. There have been little booms about it here and there — the NYT story last week about rural counties suffering under O-Care is one, as was that U.S. News story about high-end hospitals being excluded from many plans on the exchanges — but it hasn’t fully detonated yet. That’s because most consumers are still comparison-shopping for plans, which means cost is foremost in their minds right now. Not until next year, after they’ve received their new coverage and begun making doctor appointments, will they start focusing on the shrinking size of their provider networks. It’s one thing to be told that you need to pay a higher premium and deductible because you’re getting more “comprehensive” insurance. It’s another to be told that the “comprehensiveness” you’re paying for includes a less comprehensive network than you used to have under your old, ahem, “cut-rate” plan. That was the whole point of the op-ed by Edie Sundby that everyone’s linking today, in fact. Sundby’s complaint wasn’t that the price of her insurance has skyrocketed, it was that she was essentially being forced to choose between her doctor and her hospital because she couldn’t find a plan in California whose network included both. If you like your doctor, you can’t necessarily keep him/her.
This is going to blow up. Not just yet — website woes and rate shock are of more immediate media concern — but it’s coming and the White House knows it.
Officials expressed concern that the next shoe to drop in the evolving story about the Affordable Care Act would be disappointment from consumers once they are able to get on the troubled HealthCare.gov website – disappointment because of sticker shock and limited choice, according to a new document obtained by CNN.
“Mike described a general concern of PM (Project Management): getting to the point where the website is functioning properly and individuals begin to select plans; the media attention will follow individuals to plan selection and their ultimate choices; and, in some cases, there will be fewer options than would be desired to promote consumer choice and an ideal shopping experience. Additionally, in some cases there will be relatively high cost plans,” say the notes from the Obama administration’s Obamacare ‘War Room’ from one week ago…
Other notes from the war room meeting describe specific “problem plans,” and a problem with the site that prevents certification, perhaps due to a misspelling on the website.
The NYT had a nice explainer back in late September anticipating the problem of shrinking networks. It’s a byproduct of rate shock, actually: In addition to taxpayer subsidies, one way to keep the cost of plans offered on the exchange down is to exclude more expensive providers from a plan’s network. That’s not a terrible thing for the demographic targeted by ObamaCare, i.e. “young healthies” whose premiums will be used by insurers to cover the cost of others’ preexisting conditions. If you’re healthy and don’t go to the doctor much, who cares how big your network is? Some people do care, though — e.g., people who live in rural areas where the only hospital within 30 miles might no longer accept their plan and people like Sundby, who have very good reason to prefer a particular doctor or hospital. In fact, making their provider networks nice and small might be a sly way for insurers to discourage Sundby and others with expensive preexisting conditions from enrolling in their plans. They’re required by law to allow her to enroll if she tries, but make the provider network small enough and she won’t.
The point, though, is that horror stories about people losing their doctors en masse are still to come and the White House is preparing for them. Which makes me wonder: Given all the political agony that’s in store for red-state Democrats up for reelection next year, how much longer can they afford to stand by the law? Even if the website’s fixed tomorrow, they’re staring at a parade of horribles well into 2014. Rate shock is the story now; the next story will be whether O-Care can possibly hit its enrollment targets in order to make the program sustainable. (This assumes that Healthcare.gov will begin operating smoothly soon. If it doesn’t, the next story will be all about Democratic panic and Obama’s bad options in minimizing the damage from a busted enrollment drive.) The next story after that will be people outraged at how their provider networks have shrunk. After that comes the March 31, 2014 deadline for enrollment; will the administration reach its target on that or will the deadline be extended, raising the risk of an adverse selection problem for insurers? And then, as a cherry on top, after a long summer of the GOP showcasing ObamaCare nightmare stories, insurers will release the 2015 rates next October and there’ll be a new flood of small-business employees agonizing publicly about how high the premiums are on their new exchange-bought plans. It’s nothing but sh*t sandwiches for Senate Dems until next November. How long before they lose their appetites?