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View Full Version : Stanford Prof: ObamaCare's Troubles Are Only Beginning



Elspeth
12-18-2013, 03:57 AM
Besides continued website problems, increased costs, loss of trusted physicians, restricted networks, and longer wait times, economics professor Michael J. Boskin predicts bailouts of the insurance industry, pressure on state budgets from Medicaid, more loss of employer-provided policies, more permanent part-time workers, fewer talented people going into medicine (doctor shortages), and slower innovation in medical devices and drugs.

ObamaCare's Troubles Are Only Beginning
Be prepared for eligibility, payment and information protection debacles—and longer waits for care.
Michael J. Boskin
http://online.wsj.com/news/articles/SB10001424052702304403804579260603531505102

...The "sticker shock" that many buyers of new, ACA-compliant health plans have experienced—with premiums 30% higher, or more, than their previous coverage—has only begun. The costs borne by individuals will be even more obvious next year as more people start having to pay higher deductibles and copays.

If, as many predict, too few healthy young people sign up for insurance that is overpriced in order to subsidize older, sicker people, the insurance market will unravel in a "death spiral" of ever-higher premiums and fewer signups. The government, through taxpayer-funded "risk corridors," is on the hook for billions of dollars of potential insurance-company losses. This will be about as politically popular as bank bailouts.

The "I can't keep my doctor" shock will also hit more and more people in coming months. To keep prices to consumers as low as possible—given cost pressures generated by the government's rules, controls and coverage mandates—insurance companies in many cases are offering plans that have very restrictive networks, with lower-cost providers that exclude some of the best physicians and hospitals.

Next year, millions must choose among unfamiliar physicians and hospitals, or paying more for preferred providers who are not part of their insurance network. Some health outcomes will deteriorate from a less familiar doctor-patient relationship.

...The next shock will come when the scores of millions outside the individual market—people who are covered by employers, in union plans, or on Medicare and Medicaid—experience the downsides of ObamaCare. There will be longer waits for hospital visits, doctors' appointments and specialist treatment, as more people crowd fewer providers.

Those with means can respond to the government-driven waiting lines by making side payments to providers or seeking care through doctors who do not participate in insurance plans. But this will be difficult for most people.

Next, the Congressional Budget Office's estimated 25% expansion of Medicaid under ObamaCare will exert pressure on state Medicaid spending (although the pressure will be delayed for a few years by federal subsidies). This pressure on state budgets means less money on education and transportation, and higher state taxes.

The "Cadillac tax" on health plans to help pay for ObamaCare starts four years from this Jan. 1. It will fall heavily on unions whose plans are expensive due to generous health benefits.

In the nearer term, a political iceberg looms next year. Insurance companies usually submit proposed pricing to regulators in the summer, and the open enrollment period begins in the fall for plans starting Jan. 1. Businesses of all sizes that currently provide health care will have to offer ObamaCare's expensive, mandated benefits, or drop their plans and—except the smallest firms—pay a fine. Tens of millions of Americans with employer-provided health plans risk paying more for less, and losing their policies and doctors to more restrictive networks. The administration is desperately trying to delay employer-plan problems beyond the 2014 election to avoid this shock.

Meanwhile, ObamaCare will lead to more part-time workers in some industries, as hours are cut back to conform to arbitrary definitions in the law of what constitutes full-time employment. Many small businesses will be cautious about hiring more than 50 full-time employees, which would subject them to the law's employer insurance mandate.

On the supply side, medicine will become a far less attractive career for talented young people. More doctors will restrict practice or retire early rather than accept lower incomes and work conditions they did not anticipate. Already, many practices are closed to Medicaid recipients, some also to Medicare. The pace of innovation in drugs, medical devices and delivery is expected to slow significantly, as higher taxes and even rationing set in....