A Very Predictable Result Of Obamacare

Doctor

Economic Law Of Gravity

The allocation of scare resources.

That’s economics as defined by Thomas Sowell.

And doctors are scare resources – people that have skills that are in demand.  And the demand results in a cost.  And if that fact is ignored – as is often the case in DC – trouble will ensue.

In this case, the trouble will be that people who have purchased an insurance plan are going too find out that their choice of doctors is limited, sometimes severely:

Some 70% of new plans under the health law offer relatively narrow networks compared with many current plans, according to a recent report by McKinsey & Co. The consulting firm found that plans with smaller choices of hospitals had significantly lower premiums than similar plans offering a broader choice.

And why are we facing this problem?

Because the new law is forcing insurance companies to insure everyone, independent of pre-existing conditions on top of prohibiting them from charging more for demographics that then to have higher medical bills.

2 responses to “A Very Predictable Result Of Obamacare

  1. This has always been a problem. There have always been networks and plans and having a bigger network cost more in your premium. As you’re fond of saying, it’s basic economics; the insurer will charge you more to provide a more expansive network. The cost of insuring pre-existing conditions didn’t create this problem, it’s simply made it a problem for more people. The hospitals that are left out of these networks charge a lot more than other hospitals for routine services. Over at BJ they gave a good example of how Seattle Children’s (which is where we always take the kids for anything, though maybe not anymore) is a fantastic hospital for very complicated procedures but also is ridiculously expensive for routine care.

    I guess the bottom line here is that of course insurance that covers “premium level” hospitals will have higher premiums than insurance that covers only the regular hospitals. It’s not a great reality, and that BJ post I linked above has some solutions. None of this takes away from the fact that more people are eligible to get health care now than was true a year ago.

    This is where your other commenters need to chime in and say “See, they want fewer choices imposed on everyone. Soon we’ll all wear state uniforms and eat American Brand cereal in the mornings before we go off to work in our local Obamafaktory!”

    • the insurer will charge you more to provide a more expansive network.

      Well, the insurer will charge you more to provide a more expensive network. Only if bigger means more expensive will they limit the size.

      The cost of insuring pre-existing conditions didn’t create this problem, it’s simply made it a problem for more people.

      Yes. As the cost of caring for pre-existing conditions rises, then certain doctors that were profitable before become too expensive and are removed from the network.

      of course insurance that covers “premium level” hospitals will have higher premiums than insurance that covers only the regular hospitals. It’s not a great reality,

      Again, i think that you are right, however, I suspect most people didn’t:

      1. Know that
      2. Think that Obamacare would restrict their doctor

      None of this takes away from the fact that more people are eligible to get health care now than was true a year ago.

      Well, yes, but is it acceptable to degrade Peter’s insurance in order to provide for Paul?

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