Obamacare’s Fine Print

by Katherine Restrepo:

It has been several days since ObamaCare’s health insurance exchanges launched for enrollment.  Individuals can now purchase federally qualified health plans from participating insurers.  People with pre-existing conditions can no longer be denied coverage.


Sounds good so far, right? Not so fast.

If you decide to sign up for a heavily regulated heath insurance plan, look past the political debates (and the technological glitches), and take a closer look at the fine print.  It’s worth the observation.  These Obamacare health plans are infested with ugly, unintended consequences.  Consumer choice and individual rights walk on a tight leash, and the desire to pursue health care at one’s discretion has now morphed into a collective social responsibility.

The Fine Print

The establishment and rollout of ObamaCare’s health insurance exchanges intends to provide individuals with affordable plan options offered by an array of participating health insurers.  Sounds like some solid competition and choice.  But, of course, all is not what it seems.  Health insurance exchanges limit consumer choice due to three key reasons:

1. Required Benefits: Any health plan a consumer decides to purchase, whether it be inside or outside the exchange, must include 10 Essential Health Benefits as mandated by the federal law.

2.  Narrow Networks: It seems that, for states with at least half a dozen insurers on the exchanges, the availability of more plans will also yield competitive prices.  What goes unsaid is that lower monthly premiums mean narrower provider networks, higher out-of-pocket expenses, and providers paid at Medicare levels.

Last week’s New York Times wrote:

Federal officials often say that health insurance will cost consumers less than expected under President Obama’s health care law. But they rarely mention one big reason: many insurers are significantly limiting the choices of doctors and hospitals available to consumers.

The Daily Caller contributes to the issue as well:

Missouri: Patients of the state’s largest hospital system — which spans 13 hospitals including the St. Louis Children’s Hospital — will not be covered by the largest insurer on Obamacare exchanges, Anthem BlueCross BlueShield. Anthem covers 79,000 patients in Missouri who may seek subsidies on Obamacare exchanges, but won’t be able to see any doctors in the BJC HealthCare system.

Looking at this issue from another angle, roughly 70% of physicians are now employed by hospital systems.  There was a time when the majority of medical providers practiced independently.  Ten years ago, this statistic was flipped, as only 30% of physician groups worked for these health systems.

Since a majority of physician practices are now under the ownership of this excessively consolidated market, if major hospital systems are not within an exchange plan’s provider network, then patients may not have access to the quality providers who work for that hospital system.

3. Small Number of Providers: In many jurisdictions, only a limited number of companies offer plans under the exchanges, limiting the choice consumers have for healthcare. For example, in North Carolina’s exchange, only two insurance companies, Coventry Health Care of the Carolinas and Blue Cross and Blue Shield of North Carolina, have signed up to participate in North Carolina’s federally-facilitated exchange.  Blue Cross and Blue Shield already controls 85% of the individual market and is the only insurer offering plans in all 100 counties of the state.  Coventry Health Care, meanwhile, offers plans in just 39 counties.

Just as the structure of the exchanges limits individual health care freedom, the associated costs of these bloated, subsidized health plans will restrain eager individuals from signing up for coverage. And even if an uninsured individual decides to opt out, the individual mandate tax of either $95 or 1% of income, whichever the greater, will be dispersed back into the collective healthcare system. The exchanges may be open for business, but the critical question is: “For how long?”


Katherine Restrepo is the Health and Human Services Policy Analyst at the John Locke Foundation. She graduated Phi Beta Kappa from McDaniel College with a Bachelors of Arts in Political Science and Spanish


  1. All of these are symptoms of not having the government option included. So I fully support this article’s unstated conclusion that we need universal coverage for the 10 required areas with extra insurance being sold by private companies for other things.

  2. The old way was done when ailments that could not be soelvd by primary doctors lead to death. If you had cancer, you had a death sentence. Now, there are expensive drug therapies, expensive surgeries and expensive tests. With catastrophic coverage, you may not have the coverage to get the expensive test because you will not pay over $1000 dollars or your insurance does not cover for a MRI that help detect the life threatening condition. Even with catastrophic coverage, it must be universal to avoid the problem of adverse selection where those who need coverage is priced out because the necessary price to cover those are sick in the pool now but rich enough to pay for it is too high for those who need it.Where in the law is high deductible insurance, catastrophic insurance, illegal or unlawful? The government may set the standard but nothing in the bill make high deductible insurance illegal.

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