I haven’t written about Obamacare (PPACA, the Patient Protection and Affordable Care Act,  is its more formal appelation) in a while.  And, several of my clients have asked questions based upon spurious statements (yes, this opinion will be substantiated) by several insurance companies about the ability of Obamacare to work and provide profitable engagements for the insurance companies.

First, I should explain that, at least in this regard, I am firmly in Bernie Sanders’ camp.  Obamacare should always have been a single-payer solution.  Because there already are too many profit motives that are in play in our health care system.  First, there are the firms that provide the drugs and devices we use.  Then, there are the practitioners who provide that therapy.  Then, there are the hospitals and clinics (yes, I know that some are “non-profit”, but that designation does not mean that they don’t want to generate surpluses, don’t want to pay their directors “reasonable” (who determines what is reasonable?) compensation, etc.  Add in insurance companies, and it should not be surprising that our health care in America is the most expensive per unit of care.

If we had a single-payer system, the agency (it would be governmental) would arrange for competitive fees.  It is no secret that Medicare pays significantly less for drugs than does our private insurance companies.  It is also no secret many physicians are not happy with Medicare based fees- because they are much lower than these trained professionals can earn on the open market.  But, if there were no alternative pay method, this refusal would be significantly reduced.

(I do find it amazing that many folks find my last sentence annoying.  That we are forcing physicians to take a lower rate of pay than they want.  Yet, those same folks feel it acceptable to lower the wages at manufacturing firms who claim their expenses are too high, lower the wages for governmental employees so that budget numbers can be met, etc.)

Rural America

But, those are side issues.  Let’s talk about the program itself.

One of the big news items is that many firms seem to be abandoning their commitment to rural areas of the US.  Or, at least that’s what the headlines have been claiming.

Here are the facts.  The entire states of Alabama, Alaska, and Wyoming will have only one insurer available on the marketplace.  Parts of Arizona, Kentucky, Mississippi, Oklahoma, and Tennessee- the rural parts, of course-  will be down to one insurer.  A total of some 650 counties across the US will be in this situation.  (This year, there are only 225 counties with a single insurance company offering plans.)

Notice that the choice of one insurer does NOT mean there is only one insurance plan.  You do remember that there are four choices- Bronze, Silver, Gold, and Platinum.  But, we can be virtually certain that the Platinum plans (which are the most expensive) will not be among the prime choices in the rural areas.   Nevertheless, having one insurance company does leave a monopoly in place.  The doctors affiliated with that plan are the ones that will have to be chosen (for coverage).

Ant, that is one of the problems.  Rural areas have about ½ the number of practitioners that obtain in larger areas.  There are only 119 practitioners per 100K of population- most of which are general practitioners (GP) versus 225 in more urban areas.  And, the urban region is far more compact in size!

By the way, Silver Plans are chosen by Americans in some 2/3 of the cases.  And, Silver Plans are supposed to cover 70% of the costs for a given population.  The problem is that in rural areas, these plans cover wider geographical sizes, so it is harder to predict- and control- those costs.

So, it is tougher for insurers to both negotiate with the practitioner- and to obtain his/her affiliation with the program.   This has been a problem in rural areas for decades; it’s not related to Obamacare.  Which is also why folks in rural areas are far more likely to be insurance bare (25%)- and that  is despite the fact that they are more likely covered by Medicaid (50% more so!).

Now, let’s add in the fact that only Alaska, Arizona, and Kentucky of the states listed above have expanded Medicaid coverage.  (Admittedly, only 25K folks will be affected in Alaska, but Arizona and Kentucky will cover 350K and 250K respectively.)  And, none of the states have their own exchange (except for Kentucky).

So, it does mean fewer folks will have choices and it will be harder to get insurance.  But, it’s not something new.

It’s something that needs to be addressed.  Maybe by that single-payer plan?

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