Wednesday, June 27, 2012

3 Reasons Obamacare is Bad for Patients

One problem with Obamacare is that it is very hard to find out what it will really do to my future. I feel like almost no one can summarize it without bias and when I find someone who can, I can't take that knowledge with me because others believe that I am biased.
Happily, however, I belong to a profession which is supposed to put aside all interests besides those of the patient. Let's talk about patients. Here are the top three reasons that Obamacare is bad for patients, especially young adults and the poor (parenthetically, it's also bad for young doctors, since we are in both of those groups):
  1. Community ratings
  2. Weak individual mandate
  3. Increase in Medicare coverage to 133% of poverty line
The law requires that insurance agencies cover individuals with pre-existing conditions. (Right now, it can be hard for people who are already sick to get insurance, because insurance companies know that those patients will not profit the insurance company.) To avoid lawsuits from insurance companies, Obamacare also requires all healthy people to purchase insurance to offset the expenses of the sick. This is the individual mandate, and without it I cannot see how the law will stand.

However, offsetting the expenses of the sick drives up costs for the healthy. Community ratings require that companies not charge their elderly or sicker clients more than three times what they charge the young and healthy. In order not to lose money under this requirement, insurance companies may lower the more expensive patients' premiums, but will certainly inflate cheaper patients'. This is unfortunate for young people, who now leave their parents' policies at 26. It's especially bad news for the patients I am very interested in caring for as a future OB/GYN: the young women, especially those made vulnerable by poverty, homelessness, abuse, or pregnancy.

Community ratings, combined with the weak individual mandate, create what Forbes' Avik Roy calls the "adverse selection death spiral." Simply speaking, the fine for not purchasing insurance is cheaper than insurance premiums. This is especially true for the young (whose incomes, from which the fine is calculated, are relatively small, and whose premiums are inflated) and the poor. Suppose I, who am living on loans, choose to pay the fine rather than purchase insurance. If I have an accident or get sick, I can purchase insurance easily (since there is no discrimination against pre-existing conditions) for the duration of my treatment. I then return to paying the cheaper fine, or stay on insurance for my lifetime. If many healthy people follow my example, then who is subsidizing the sick? If many chooses the fine, the sick and those who feel obligated to purchase insurance (e.g. young families) will still pay high prices for their care.

Finally, the increase in Medicare coverage, while in theory benevolent, is probably going to be awful for those it aims to serve. Already, many physicians do not "take" Medicare patients because Medicare reimburses services and drugs below their market cost. If the number of patients eligible for Medicare increases in a community, the population of people trying to make appointments with doctors will reflect this shift. Doctors will be faced with more under-reimbursed hours. Many physicians deal with this problem by refusing to take Medicare, or by limiting the number of Medicare patients they see.

Ultimately, Obamacare doesn't seem to change the status quo much, except by increasing the number of regulations and government-paid employees. The poor will still have trouble getting into doctor's offices (some offices may topple in the shift). The sick will still pay heavy totals for their conditions (now they will pay the insurance company instead of the hospital). The young will still be the largest group of uninsured (though now they will pay an annual fine for being that way).

In short: Obamacare is problematic, and I, as a future physician (and as a young, poor, relatively healthy patient) want a different solution to our national dilemma.

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