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March 8 2016

Shame Game: Behind the Admistration's New Health Insurance Labeling Rules

Patrice J. Lee

One of the infamous broken promises that President Obama made when peddling ObamaCare to America was that if you liked your doctor, you could keep your doctor.

Americans learned how untrue that ended up being as the networks of doctors and healthcare professionals who are a part of ObamaCare are narrower than the Administration projected.

Now, the Obama Administration plans to rate health insurance plans based on how many doctors and hospitals are in their networks. It’s a shaming tactic to prod ObamaCare insurers into expanding their networks in response to complaints by customers. But it may actually backfire on the administration, by ending up forcing insurers out of the ObamaCare system.

Using its regulatory powers, the Administration will begin to label the expansiveness of the network for each plan sold on Healthcare.gov. The new rating system will indicate the breadth of a health plan’s network compared to others in the same area. Currently, customers can find out if a specific doctor is included in a healthcare plan, but don’t know just how big or small the network may be.

The New York Times reports:

Ms. Corlette, the Georgetown University professor, said that in writing the new rules, “the administration was walking a very delicate line, pushing forward with consumer protections while trying to keep insurers onboard and participating in the marketplaces.”

In some markets, consumers can choose from dozens of health plans. In a move intended to simplify the shopping experience, the Obama administration has devised six model health plans that it describes as standardized options. Federal officials specify the amount of deductibles, co-payments and other charges for doctors’ services, hospital care, X-rays, laboratory tests and prescription drugs.

The standard features will make it easier for consumers to compare plans, officials said, and the government will highlight these plans in some way on HealthCare.gov. But the government is not requiring insurers to offer the standardized options or limiting their ability to offer other plans in 2017.

Let’s be clear that what the Administration is doing here is trying to clean up a mess of its own making. Because the un-Affordable Care Act required that insurers start covering a vast array of services and procedures, many unnecessary for individual policy holders, it raised the costs of coverage, prompting insurers to limit the choice of doctors and hospitals to control costs. With costs continuing to rise, some insurers thinned their networks further, even dropping popular teaching hospitals from among their options.

Like menu labeling at restaurants, the Administration's cry is transparency, but it's really about pressure. Giving insurers and clients more leeway about their individual needs would go much further in helping, but freedom is not a hallmark of government health care.  

At the same time, the Administration is raising the cap on out-of-pocket costs established under ObamaCare by about $300 to $7,150 for an individual (14,300 for a family). It’s in response to increases in deductibles and co-payments, which have deterred people from ObamaCare.

More regulations are not the answer. There’s a fundamental issue with government being so intimately involved in the healthcare market.  Medical care is a limited resource and there will always be trade-offs between cost and quantity. The laws of economics work in every other sector, but progressives are particularly eager to regulate in the healthcare realm? Unfortunately for them (and us) you can’t regulate your way to healthcare success.

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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