Conflicting appeals court opinions threaten ObamaCare exchanges

 

By Jennifer Popik, JD, Robert Powell Center for Medical Ethics

Center For Disease Control Reports Highest Number Of Measles Cases In 20 YearsOn Tuesday, the U.S. Court of Appeals for the D.C. Circuit delivered another blow to the Obama Health Care law– a law that has continued to remain unpopular and plagued by problems.

In a 2-1 decision the court said that insurance subsidies cannot go to people in federally-run state exchanges, but only to those the state itself runs. Currently, only a mere 14 states run their own exchanges.

However two hours later, the 4th U.S. Circuit Court of Appeals, in a 3-0 decision, held that both sets of exchanges are eligible for subsidies. The conflicting opinions set up a clash that will likely end up in the hands of the Supreme Court.

The center of the cases–the state exchanges–has been overwhelmed by problems that started with a dysfunctional website (healthcare.gov). More recently a serious and widespread new problem has arisen.

The problem is that when Americans are purchasing plans in the exchanges, they are shocked to find out that they no longer have access to specialist and hospital systems they did before.

While the media has occasionally reported on this for months (NRL News Today has addressed the limitations at powellcenterformedicalethics.blogspot.com), Politico magazine reports that the problem is deep, spreading, and shaping up to become a major election issue.

In his piece, “Obamacare: Anger over narrow networks,” Politico’s Brett Norman reports

“Anger over limited choice of doctors and hospitals in Obamacare plans is prompting some states to require broader networks — and boiling up as yet another election year headache for the health law.

“Americans for Prosperity is hitting on these ‘narrow networks’ against Democrats…. And Republicans have highlighted access challenges as another broken promise from a president who assured Americans they could keep their doctor.”

While people would prefer to pay less for healthcare (especially given how high premiums and deductibles are under ObamaCare), there is growing public outrage when people are told that the cost of these less expensive plans is less access to the doctors and hospitals of their choice.

As Norman points out,

“The Affordable Care Act sets out general guidelines directing insurers to include enough doctors and hospitals to provide timely access to care, including specialty care. But it does not spell out what that means, leaving it to states to fill in the blanks.

“About 70 percent of the lowest-cost exchange plans were built on narrow networks this year, according to the consulting firm McKinsey, and on average they cost 13 percent to 17 percent less than comparable plans with broader networks.

This has prompted many states to take legislative or regulatory action. Even though the exchanges are still new, 70 bills have been introduced in 22 states aimed at broadening networks.

In discussing one state’s particularly tough struggle, Norman writes,

“In New Hampshire, for instance, Anthem Blue Cross and Blue Shield was the only insurer on the market, and it cut 10 of the state’s 26 hospitals out of its network. That left residents in some rural areas with long commutes to the nearest hospital in their network, and the issue has become a political football in the congressional races there.”

Those who promote these narrow networks often tout the narrow plans as “one choice among many” – saying that people ought to be able to weigh the tradeoffs. However, according to Norman

“Incomplete or inaccurate provider directories were rampant in this year’s plans on both the federal and state exchanges, leading consumers to buy plans thinking they cover their doctors only to find out later they do not. That’s led to GOP charges that Obamacare has broken the president’s promise that ‘if you like your doctor, you can keep your doctor.’

“Another complication: Even if a patient goes to an in-network hospital, not all the doctors are necessarily part of the plan. For instance, patients can get stuck with thousands of dollars in bills for anesthesia, even if surgery is covered. ‘What we’re seeing is consumers not knowing and getting stuck with high out-of-network bills,’ said Stephanie Mohl, government relations manager at the American Heart Association.”

While many are quick to place some of the blame with insurers, it seems more likely that the real culprit is the Obamacare provision under which exchange bureaucrats must exclude insurers who offer policies deemed to allow “excessive or unjustified” health care spending by their policyholders.

Under the Federal health law, state insurance commissioners are to recommend to their state exchanges the exclusion of “particular health insurance issuers … based on a pattern or practice of excessive or unjustified premium increases.” The exchanges not only exclude policies in an exchange when government authorities do not agree with their premiums, but the exchanges must even exclude insurers whose plans outside the exchange offer consumers the ability to reduce the danger of treatment denial by paying what those government authorities consider an “excessive or unjustified” amount.

This means that insurers who hope to be able to gain customers within the exchanges have a strong disincentive to offer any adequately funded plans that do not drastically limit access to care. So even if you contact insurers directly, outside the exchange, you are likely to find it hard or impossible to find an adequate individual plan. (See documentation at www.nrlc.org/medethics/healthcarerationing.)

When the government limits what can be charged for health insurance, it restricts what people are allowed to pay for medical treatment. While everyone would prefer to pay less–or nothing–for health care (or anything else), government price controls prevent access to lifesaving medical treatment that costs more to supply than the prices set by the government.

Critical access to top health care providers is already being severely restricted in the individual health insurance plans on the Obamacare exchanges and there is reason to believe that when the exchanges are expanded to employees of all businesses, many employers will end their present coverage and force their workers into the constricted exchange plans. While Obamacare continues to be implemented in 2014, it is important to continue to educate friends and neighbors about the dangers the law poses in restricting what Americans can spend to save their own lives and the lives of their families.

You can follow up-to-date reports here: powellcenterformedicalethics.blogspot.com

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