Health care providers are rejecting people with Obamacare policies, Medicare, and Medicaid because of reimbursement rates, and the financial inabilities of Obamacare patients to pay their share.
Insurance spreads large financial risks over a pool of people who face that risk. Only some of the people will actually experience the losses. Members of the pool pay “premiums” to pay the losses, administer the process, and provide a profit to the owners of the insurance company.
Insurance companies use “underwriters” to:
- Measure the potential financial risks of issuing policies
- Set the conditions included and excluded
- Set the premiums and duration of coverage
The idea is to:
- Keep premiums low for normal risk people
- Set higher premiums for people with higher risks
- Limit coverage for conditions that already exist
- Decline people who are high risk
Obamacare health insurance plans cannot decline people with pre-existing conditions, by law. The medical costs are not a risk for these people, they are an enormous, financial certainty. These high costs must be covered by premiums paid by other insured policy holders, or absorbed by the insurance company.
Obamacare prohibits “marketplace” insurers from rejecting high-risk applicants, and people with preexisting conditions. However, not all policies are created equal. The variables are:
- Government premium subsidies
- Patient co-payments
- Patient and family deductibles
- Reimbursement rates (the amounts insurers pay the doctors, laboratories, imaging clinics, and hospitals)
Service providers need to get paid an acceptable amount, in an acceptable amount of time. Insurers offer reimbursement levels, but providers do not have to accept them. Providers can set the minimum for their services, but the insurers do not have to include them in their “network.”
The medical community now does what insurance companies used to do – when in doubt, decline Obamacare, Medicare, and Medicaid patients.
The top quality insurance companies are withdrawing from the marketplaces to avoid the losses they experience from the pre-existing condition patients. The insurers are limiting the types of plans to Health Maintenance Organizations (HMO’s) which only use selected providers. They are eliminating Preferred Provider Organizations (PPO’s) which give the insured choices of providers within a selected “Network,” and “Out of Network” for higher copays.
People are dropping their health insurance because the combined costs of premiums, co-pays, deductibles; the lack of providers who accept their insurance contributes to this attrition.