Health insurance

Less Expensive Insurance Means Less Thorough Coverage

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Um, whoops?

Earlier this month, I predicted that, if allowed to stand, Massachusetts Governor Deval Patrick's rejection of 90 percent of the state's health insurance premium hikes would result in "service cuts [and] reduced coverage." Well, a judge said that insurers had to comply and post new prices. And now we're seeing the state's health insurers look for ways to… cut services and reduce coverage in order to bring down rates.

Health insurers are starting to sell policies that largely bar consumers from receiving medical care at popular but expensive hospitals such as Massachusetts General and Brigham and Women's—a once radical idea that is gaining traction as a way to control soaring health care costs.

Governor Deval Patrick and Senate President Therese Murray have included such restricted provider networks in their recent legislative proposals to control rising insurance rates.

This is in a state where there's already a shortage of primary care physicians, and where, despite some recent overall state improvements, the capitol city leads the country in doctor wait times.

Now, I don't think that individuals should necessarily have more or less coverage. But the effect of the state's rate rejections is to further restrict choice in a marketplace that, thanks to burdensome coverage mandates and tax policy that ties insurance to employment, already offers most consumers somewhat limited options. The state isn't controlling costs by creating greater effiency in the system; it's just (indirectly) knocking more expensive coverage off the list of available choices. 

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  1. Health insurers are starting to sell policies that largely bar consumers from receiving medical care at popular but expensive hospitals such as Massachusetts General and Brigham and Women’s?a once radical idea that is gaining traction as a way to control soaring health care costs.

    We’ll just make that illegal. Problem solved.

    1. Or The Great Barack will mount his magic unicorn and sign an executive order abolishing the laws of economics. Done, and done!

        1. Fucking Erasure.

      1. While he’s at it can we get him to repeal the law of gravity? It sucks when you trip and fall down and hurt yourself.

        1. I’ll jump up and down with joy if he does that

  2. Just don’t call them death panels!!

    1. Semantics.

      Romney/Palin 2012!!!

    2. They’re LIFE PANELS.
      They decide who gets to live.

      1. All of them!

        1. Never figured you for an opponent of capital punishment.

  3. Wait, if you pay less, you get less? I don’t understand.

    1. “if you pay less, you get less? ”

      It’s even worse than that. The law dictates not only that you have to pay less, but also makes it illegal to reduce the biggest “insurance” rip-off known to mankind, like paying $1000 annual additional in premiums to get first-dollar coverage on $1000 worth of **potential** high-probaility, low-risk spend. I love being forced to buy first-dollar coveragefor preventive care. It’s almost as much fun as burning cash, and with the same effect.

      1. Exactly. If you KNOW you’re going to get an annual physical, why the heck would you want to buy insurance for it? It is pretty much by definition cheaper to pay out of pocket.

  4. Frictionless machines are for losers. We can now bring machines that create energy into existence just by passing laws that say so.

  5. The link to your earlier article does not work.

  6. It’s death tile.

    1. I always envisioned more of a Death Hollywood Squares.

      I’ll take Whoopie to block…

      Ooo, sorry. X gets the square. Out comes the feeding tube.

  7. I fail to see how Obamacare will turn out the same way. He told us if we like our plan we can keep it.

    1. Sounds like a scam to me.

  8. I used to have that image as a poster. If you look very closely at the skiff at the bottom, it’s got an outboard.

    I can’t remember if it was Obama at the helm or not, though.

    1. Ha ha ha ha. You dumb bastard. It’s not a schooner… it’s a Sailboat.

  9. I fail to see how this is different than any HMO operates now? I figure this is the market at work. If an autobody repair shop starts charging rates that are too high, car insurance companies take repairs somewhere else. You want cheaper insurance, you get cheaper insurance. Maybe the insurance companies should use this as a chance to upsell–buy this premium policy and get access to the top hospitals. It would be an interesting experiment to see how consumers respond–do they really value going to those hospitals? Part of the problem with the current system is the lack of competition in the insurance markets in many states and the lack of competition amongst hospitals in many regions. In my city there is really one hospital chain that owns almost every single hospital and medical center in the region.

    1. “I fail to see how this is different than any HMO operates now? ”

      You’re right. It sucks just as bad.

    2. Exactly right, Duncan. The plans would include the high-prestige/high-cost providers as marketing loss leaders.

      Now that their rates are capped, those marketing loss leaders are no longer worth the investment.

      The whole point of an HMO or preferred provider plan is to steer patients to low-cost/high efficiency (take your pick) providers.

      This is precisely what you would expect to happen, eventually, in the current increasingly distorted marketplace. And its only going to get worse with the federal leviathan involved.

      1. Is it a bad thing for insurance not to cover the high-prestige/high-cost providers? Most of the low-cost/high efficiency providers still provide a decent standard of care. People seem to want Chevy prices on Cadillac policies. Maybe if the insurers offered additional insurance to cover going to the high-prestige/high-cost it would better allow differentiation in the market and might, depending upon the results, force the high-cost providers to lower their costs.

        1. Of course not. Surely all those people paying for rare, expensive care out of pocket can keep those facilities in existence.

      2. And when it gets bad enough, the people will demand the politicians solve the problem and the feds will outlaw private insurance and health care. Wasn’t that the bottom of the slippery slope all along?

        1. it is in canada

    3. You’re right. Massachusett’s health care system is doomed to fall apart.

      I predict they will start restricting treatment for pre-existing conditions until functionally we’re back to the original rules.

      Okay … I HOPE.

  10. I am so glad I don’t practice in MA.

  11. Strange, I never saw this coming.

  12. Holy crap! Reason racists. Governor Patrick is black, so now the Mass socialized medical system is falling apart. You guys certainly don’t try to hide your racism, Peter. It’s so obvious every time!

    1. Reason don’t care about black people.

      1. Reason don’t care about black people Kanye West.

        FIFY

  13. A judge can set fair market value.

  14. The white devils that own Mass General and Brigham and Women’s have stolen the wealth of poor brown people for far too long. It is high time the government reversed this injustice.

    1. Khalid, is that you?

  15. God forbid you’re on Medicaid now and need a hip replacement, what’ll it look like when we’re all in the same boat?

    The correct answer is that wheelchairs are less expensive than hip replacements…

    http://en.allexperts.com/q/Med…..cement.htm

    …and if you don’t want to spend the rest of your life in a wheelchair?

    There’s no function for quality of life issues in Excel. They don’t show up on anybody’s spreadsheet.

    And Obama hasn’t spent any time thinking about that. At all.

    1. Look, if we let people buy hip repleacements then rich people will end up with something that poor people don’t have.

      That’s just wrong.

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