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February 26, 2014 at 01:08 PM
Friedrich Nietzsche wrote, “One is fruitful only at the cost of being rich in contradictions.”
If that is true, Washington, D.C., is the biggest orchard in the known universe. A significant part of the winter harvest seems to be a strange fruit that expands or contracts, solely dependent on the need of the grower on any given day.
In my September 2013 column I cautioned, “As the public begins opening their eyes to how the PPACA ‘panacea’ is going to work in their world — the real world — they are expressing their disapproval.”
One of the examples I cited was a move to control premiums by narrowing networks. “Although early focus groups showed many would be willing to trade lower costs for more restricted networks, it will be interesting to see how quickly that willingness converts to dissatisfaction as policy and reality converge.”
Let the dissatisfaction begin! Last month, Bloomberg.com ran the headline, “Doc Shock Reaches the Masses.”
As we have previously noted, the equation for pricing a medical insurance policy has only so many variables. Despite the perception of many Americans, there is no health care scheme that can provide unlimited medical care on demand for free.
Faced with fewer underwriting tools and increasing pressure to keep premiums low, carriers used one of the few variables left to them. They crafted narrower networks and drove skinnier deals that achieved the plan price points they needed. We all know how that works where the rubber meets the road don’t we?
Megan McArdle, who authored the Bloomberg article, summed it up brilliantly when she wrote, “However much good, sound policy sense narrow networks might make, they are political poison.”
The fine folks in the orchard who yammered about keeping costs down are now doing the contradiction happy dance. At the time of this writing, lawmakers in Mississippi and Pennsylvania (others are rumored) are considering bills that would force plans to add more hospitals and physicians.
