As more and more people sign up for Obamacare, early indications are that there will be some adverse selection- more middle aged and older people, fewer young and healthy people. This creates the “downward spiral” as those healthy people who signed up eventually drop out because prices are too high. This worsens the risk pool and increases prices for those who remain. Then more drop out.
This will accelerate as states and corporations discontinue coverage for some because they can now purchase coverage through Obamacare. The people affected by this will mostly be retirees who are older and less healthy- more costs will be run through the exchanges.
If we don’t do something about the core issue of prices, this is not sustainable.
Whether the issue is people who only want catastrophic coverage but can no longer find it, or people who are forced to by coverage that cannot possibly apply to them (think 60 year olds purchasing maternity coverage), or part time workers whose hours are cut even further, there are many people who the market is presently ignoring, at great cost to the system as a whole and to those of us who participate in it. And I am not talking about the price of insurance. I am talking about the costs covered by the insurance- hospitals, physicians, drugs and devices.
We need to:
-force the publication of prices. There have been several articles over the past year detailing how hospital and physician prices vary widely. They seem unable to estimate prices until after you have received the service, then they are suddenly quite certain what you owe- and it’s a lot.
-broaden the scope of services for “physician extenders”, such as PAs and Nurse Practitioners. If there is a “physician shortage”, the simple rule of supply and demand will ensure that they are in the “power position” in each and every discussion. Allow more extenders, fix the shortage, reduce physician bargaining power and change the entire dynamic of the discussion with physicians.
-levy punishing fines, not token fines, when organizations are shown to have schemed the system, as one Florida hospital organization was recently shown to have done (driving up admissions and penalizing doctors who resisted).
-and yes- allow the market to provide products that are aligned with people’s needs. If some want a catastrophic policy, they should be able to find one. If a 60 year old couple does not want to buy maternity coverage, they should not have to.
I am not in favor of unfettered market freedom- after all, it is the market that gave us slavery and sexual trafficking. I do believe, however, that a proper mix of regulation and market freedoms will provide the best answer. Right now, we have swung too far in the direction of regulation, where attractive market options are forbidden by law. We need to move back to a place where the market and regulations are in proper balance. And if we provide transparency and allow the market to work, with some regulatory oversight, then prices will surely decline.