Here’s an interesting article by healthcare economist Bob Laszewski on the nuances in the new California insurance rates. It counters some of the initial stories that the post-ACA rates were lower than expected by pointing out that the new policies had some significant differences from those issued before the ACA. The most interesting point, though, was that the Blue Shield policy to be offered by the healthcare exchanges will have a limited network, omitting UCLA Medical Center and Cedars Sinai as well as about 2/3 of the physician in their network. This limitation won’t be applied to non-exchange policies, which will be more costly.
Is the ACA the tipping point where healthcare consumers will be willing to accept a limited provider network in return for a lower premium that they themselves must pay? As opposed to employer-provided insurance, exchange-purchased insurance will be paid for by the consumer, albeit with some federal cost-sharing for lower-income participants, so exchange purchasers will likely be more diligent shoppers. Will hospitals that have prospered from high commercial payment rates be forced to voluntarily lower those rates or risk being left out of networks that cost-conscious consumers will now decide are “good enough”? Will this strange back-door market effect of the ACA be more effective at lowering healthcare costs than the more publicized features of the ACA such as accountable care organizations? Too soon to tell, but we’re enjoying the irony.