What You Need to Know about the Healthcare Exchange Policies

medical-symbol-chromeWe have a major new concern, and it isn’t about the website.

When President Obama’s Affordable Care Act passed, our main worry was whether high deductible medical insurance plans would be allowed. Section 1302(e)2(A) seemed to limit high-deductible insurance plans to those under 30 years old.

Patients relying on natural health physicians need high deductible plans—because many natural health physicians are not able to accept insurance payments. Paying cash to such doctors, but backing it up with a catastrophic policy, makes sense for natural health patients.

Fortunately, the Department of Health and Human Services listened to all the messages pouring in to keep high deductible policies. The regulations appear to allow them for everyone. Indeed, in some cases, the deductibles are now too high, so that for example a couple planning to have a baby might have to pay for all the delivery services out of pocket.

The survival of high deductible policies as an option is the good news. But we now have a new concern about the exchange policies, one unrelated to deductibles or website functionality.

The new exchange policies are being marketed as private insurance policies, but they are very different from the private policies of the past.

Private policies in the past paid doctors more than Medicare, and much more than Medicaid. Insurance companies don’t reveal to customers what they pay doctors, but word is leaking out that in some cases the new exchange policies pay doctors barely more than Medicaid.

They also severely restrict the network of doctors and hospitals available to you. Leading healthcare analyst John Goodman has referred to the new policies as “Medicaid Lite.”

Why are the new exchange policies constructed in this way? Not surprisingly, it has to do with insurance company economics.

The Affordable Care Act mandates that all policies broaden treatment coverage. This raises costs. In a normal market, the insurance companies would charge customers more if they are old and sick (thus using more of these services) and less if they are young and healthy. But the Affordable Care Act restricts their ability to do so.

In actuarial terms, insurance companies are legally required to overcharge the young and healthy and undercharge the old and sick. Ordinarily this would lead old and sick people to sign up and young and healthy people to avoid doing so, even if they have to pay a tax as a consequence. If this happened, insurance company profits would collapse.

So how to attract young and healthy customers? They are known to buy mainly on price. The goal thus becomes to get the price of the new policies as low as possible by raising deductibles, restricting doctor networks, and underpaying doctors.

Young people won’t know how little doctors are being paid, at least until they try to find a doctor who will take them. Then, like many Medicaid patients, they may find themselves looking in vain, and in the end have to go to the hospital emergency room to be treated.

Old and sick customers will fare even worse. In every legal way possible, the insurance company may try to avoid them and, failing that, to get rid of them.

Let’s hope it isn’t this bad. We will know more about the new policies in the next few months, and we will keep you posted about what we learn. In the meantime, while these concerns get sorted out, it may be wise to look for traditional private insurance policies sold directly by the insurance company if you possibly can.


  1. I always thought doctors were overpaid as it was, seeing patients for 10 minutes to the tune of $110 bucks per visit. Wouldn’t we love to make $11 per minute? I mean that they live at a pretty high standard of living compared to the rest of us. Yes, $1 toward malpractice and another for office space, and another for staff, I understand it’s tough at $8 per minute when here, the minimum wage is $7.25 per hour.
    That said, I’m noticing something else with the ACA that I’ve not heard a word about. My husband and son were both canceled from Blue Cross/Blue Shield, both high deductible junk policies. No problem for my son. But we live in Arizona, a red state and also in the poorest county in the US. Lake Havasu has come in at 5th poorest town in America. Our hospital is insurance owned and, by far, the worst. If they can’t band aid it, they air vac you to Las Vegas or Phoenix, and the price is $20K +. ‘
    In searching out insurers on the new exchanges, we noticed that unless one lives in the metropolitan area of Phoenix, one cannot see a doctor there. You can, but you pay in full. Las Vegas would be out of state. That means if one was going to Mayo Clinic in Phoenix for chemo or whatever, the new insurances will not cover “out of network”, so we are stuck with poor quality healthcare and we can like it or lump it.
    I’d like to hear something about those of us in rural areas of red states and what we can do.

  2. Here in CaliforniaI have found that prices for those over 50 are MUCH MORE than for a 35 year old. The guidelines now allow me to have insurance (“pre-existing conditions” ) caused me to be denied coverage before. BUT the cost is way up there, very expensive. We don’t get a subsidy. I was forced to purchase insurance this year from the Managed Risk program in California and will be keeping it because it’s less than other Kaiser plans. I do hope there is some adjustment to the costs for older members in following years.

  3. I am Outraged at the Cost of this “Health Insurance”. I would cost me a Minimum of $550.00 in my area – a MONTH ! I’d really like to know WHO can afford that. After many BAD experiences with Dr’s in past years – I learned Alternative – by some GREATS in the Business – I do not go to Dr.’s – or seek any of their Preventative Care. I do it all myself – and that’s the way I like it. When it’s my time – it’s my time – I don’t want them interfering. I am 63 yrs. YOUNG – and self employed – I need to save for Retirement and Emergency care (if I need) – not their GARBAGE of “Insurance”. I just can’t believe more people are not SCREAMING about this. Is there anything that can be done now???

    1. M, I’m in the exact same situation you are in. For now, I’m going to eat the penalty. All opinions aside regarding the ACA ( even though I’ve never approved ot it), it doesn’t make any sense to sign up for something that no one knows anything about. Even Pelosi said that ‘ none of us will know what’s in the ACA or how it will work until we pass it and use it’. I wouldn’t be the first in line to receive a vaccine and I won’t be first in line to receive insurance. Realistically, everyone, whether insured or not, faces medical bankruptcy. Did you know that 70 percent plus of all medical bankruptcies are incurred by the insured? Insurance has its benefits but it’s mostly a fear mongering business and most of our money spent on premiums is just wasted AND drives up the cost of healthcare. WHen I had insurance many years ago, I used it all the time because I subconsciously felt the need to get my money’s worth. All that did was make me sick and sicker and sicker. I finally got rid of the insurance, found a really good doctor who didn’t except insurance and he changed my life for the healthier. I take care of myself and I get penalized. Seems we reward gluttony too much in this country…gluttony that makes us sick and poor and the corps wealthier by the claim.

  4. Just a note further on this healthcare insurance topic. It seems that much that is being talked about costs is not transparent. In the state of Maryland where mental health services have been mandated for treatment like any other health care service, costs overall actually went DOWN. This is in spite of the fact that Maryland has times of the year where people can sign up for health insurance with no penalty, regardless of pre-existing conditions. In addition, the state has it’s own healthcare program.
    So, for insurance companies to now, all of a sudden, drastically cut what they pay out to doctors is just another example of them gaming the system and driving profit! For the last 15 years, insurance companies have been trying to force doctors into medical jobs, vs being independent practitioners. This system, which mandates the 10 minute office visit and other anti patient practices is as much a threat to quality health care as anything we have seen to date.
    The cost issue in health care does have to do with insurance companies and their need to continue to show large profits. I think every business needs to make a profit. But, why should insurance companies be allowed to charge whatever they want, when the utilities companies are regulated?
    Quite frankly, this does not make any sense at all.

  5. How in the is this liberal regime in the w.h. getting away with this?
    This is classic “tail wagging the dog”
    If I didn’t know better, I’d say the Republicans are in on this too as they’ve shown
    little to no opposition to the healthcare mess, or not even come up with a comprehensive
    Let it fail under its own weight? How much damage will be done in the mean time?
    Absolutely disgraceful!!

  6. The entire plan is a load of hooey. It will do EXACTLY the opposite of what our Obomanation claims and will have far less people insured than ever before. My high deductible policy will exactly double and we have not collected a penny from any health insurance for 40 years. You would think that we would be thanked for that and not kicked in the butt. Our nation is in a major crisis withy a huge percentage out of work and no longer being counted since their unemployment insurance is all used up. The banks are holding many thousands of foreclosed homes off the market for fear that if the public and the Realtors knew how many unoccupied foreclosed homes they were holding, in inventory, there would be yet another 40% decline in housing prices. This sucks and few even know remotely how much!

  7. Here in New Mexico, the usual HMOs will be doing the exchange policies, just as they do most of the business in other health insurance policies. Practitioners, including acupuncturists like me, who have contracts with those insurers will be paid exactly the same for services through the exchange policies as through other policies. With some insurers the pay is at a reasonable market rate, with others (Presbyterian particularly), pay is much lower. But the contract rate is the contract rate for all policies.

  8. The emphasis of any health care should be on preventing illness. That is why health savings accounts make sense. If the government gave a $5000 tax credit to individuals to pay for taking care of your own health care, and if that credit rolled over to the following year to accumulate, and could be used for anything that promotes health, the decision for healthy habits would be rewarded.
    Instead, the emphases is making sure that poor life styles have access to mediocre care (as afforded by the restrictions and redistribution policies of Obamacare.
    Get the government out of health care and release hundreds of billions of dollars tied up in this bureaucratic goliath to go into health.

  9. My husband & I have been “shopping’ (tearing our hair out) on the healthcare.gov website since Oct1. Buying our insurance through the site would cut our premium costs in half but would not cover us for ANY out of network costs, with no cap. As a trauma ICU nurse I know how easy and common it it is to be suddenly very ill or injured and cared for out of network, racking up hundred’s of thousands in costs in a week or two. We are buying our insurance privately & lucky to be able to afford it. Many can not.

  10. I’ve been self paying my health insurance since 2002. I purchase my own policy through a local agent. I do not buy Obamacare, but my insurance company must follow the Obamacare rules. Therefore, my rates went down by $300 per month. I did not vote for Obama, but I must admit that my health insurance monthly rate went down, and I was allowed a free mammo, GYN exam and a colonoscopy, whereas before Obamacare, I would have had to pay for my mammo, GYN annual exam & colonoscopy, because I had a $1,500 deductible. I am in my 50’s, and am charged $300 a month. American’s need to shop around with private health insurance agents so they can benefit by having affordable insurance (& so that they will always be able to afford to see a Dr. when they get sick). I believe a 50 something year old woman would pay the same on the Obamacare website….so why not just shop around to get the same price outside, and be independent. I wouldn’t want the govt. dipping into my bank account every month when I can get the same price outside.

    1. So, I don’t need a mammogram – or a pap test – I had a bilateral mastectomy some years ago – after several surgeries, chemo and radiation and have had my uterus etc. removed because I had fibrous masses. A colonoscopy I had some years ago and will probably be told I need to have another some time in the future. For now I have insurance through work – which I pay a portion of, and co pay as well. What is crazy about so much of this is that we are told that antibiotics are no longer effective because of over-use – by people, but also by large CAFO’s which regularly feed and inject critters with antibiotics, farmers have been sold a bill of goods to plant genetically modified seeds and plants and then spray them with glyphosate which continues on killing the microbes in the soil that work with the plants, insects etc to make food that is nutritious – that big pharma is protected from their mistakes, that vaccines are being pushed in so many ways, and then we get this health care thing based upon bad medicine where doctors know little about nutrition and politicians and lobbyists make the rules.

  11. Even a high deductible police will cost me almost $700 a month. After paying electric about $150 a month and property taxes, that leaves me about $10 yes ten dollars a month to live on. The plan I looked at does not cover office visits of any type and has a $15,000 deductible. Affordable? I personally do not think so.

  12. Kate – I know a few people in the Lake Havasu area……..and their “choices’ are slim to none. I feel bad for you……….and I deal with similar problems in my area….our Local Hospital is the PITS.—.just Horrible….. is an understatement !!! We have Very Limited choice of Health Care plans……..all OUTRAGEOUS – like I said previously. I have Several friends that have had to File bankruptcy due to their Medical / Cancer treatments. But, I have to emphasize – no one is TAUGHT – PRVENTATIVE!! By that I mean – treating Pathogens: Parasites, Viruses, Bacteria’s and Fungus problems that Disrupt our Cells to CAUSE DISEASE. In your area like mine – it is mainly Valley Fever Fungus. It’s SAD to me that Doctors do not consider Alternative Treatments for this- they work – I am Living Proof. Basically the over all Population is CLUELESS on this deadly Pathogen. I don’t even think Cancer Treatments – in Phoenix deals with this!! Well, I certainly wish you and your family the best .

  13. Nobody mentions how illegal this garbage system really is. Who EVER gave the feds authority over your discretionary income expenditures? Nobody. Out of their jurisdiction in every way – but to pretend it is “legal” the Supreme Court Moronjority says it amounts to a ‘TAX”. Sure – no wait! NO business is allowed to levy tax, so that is just more flatulence sounding like words.
    The fed govt ALSO has no jurisdiction over our health choices. I’m like M Mayer above and except when insurance paid for the little girl that creamed me by driving totally out of control (100+mph in a 45 curve) i DO NOT USE MDs! Won’t – i’m too smart i guess, but nobody has the right to force me to choose treatment modalities i know are wrong, damaging, or not in line with my belief systems/knowledge. NOBODY. How can you lose your liberty more than by being herded into a one-size fits all death funnel like our American Medical nightmare – the worst in the industrialized nations. If this goes – YOU ARE ALL SLAVES.
    Then you have given them the right to dictate how and what you will spend “YOUR” money on, and use it to make the insurance companies that WROTE this abominable legislation super-rich as you are forced BY them to PAY them, as they cut back on their expenditures for you, and your health and life disappear.

    1. Additional to the above:
      Health care reform means the system of healthcare improves. That means more effective treatments, etc. Increasing insurance coverage in the worst medical system and amplifying the damage and control of the worst aspects OF that entire system is insane if you refer to improving people’s health.
      SOME of the things done wrong as “standard of care” procedure; Almost all (700,000/yr – USA) gallbladder surgery. Gall stones and bile issues are problems caused by LIVER – not gall bladder. Get your biochemistry right – allopathic idiots. Stomach acidity issues – 0.000111% of the people with heartbure, GERDS, and Acid Reflux have too much acid. 99.99% have too LITTLE acid. Mammograms – carcinogenic. About 50,000 unnecessary mutilations/yr in US from false positives – oops. There have been more accurate, non cancer causing options since the 90s. (thermography)
      Journal of Oncology Fall 2012 – 5 yr survival rate of all chemo patients = ONLY TWO PERCENT!!! Talk about taking your death sentence. 98% fatality for 5-yr span is pretty bad “health care”.
      Over 40% of all drugs in the PDR are cancer causing. There are 42 known drugs in the PDR that mimic onset of dementia/Alzheimers. Take those drugs away – patients lose the symptoms – EXCEPT for benzodiazapines – that causes PERMANENT BRAIN DAMAGE.
      What diseases are frequently mistreated in whole or part by allopathic medicine? Aside from the idiotic and obvious flaws of vaccines of course? How about MS, Heart Disease, Type II Diabetes, cancers, let’s throw in PSA tests as worthless too (Stanford 2004 proved PSA tests have NO indication of illness of any stripe. ONLY show size of prostate) cholesterol, most dietary advice, angioplasty and bypass surgery, stomach resections, pharmaceutical drugs, etc etc etc.

    2. The primary thing to keep in mind regarding all this is: Obama wants a “Single Payer” system…that IS his goal. The Affordable Care Act is, by intention and design, destined to create a collapse in the whole health care and payment system. Obama wants it his way, his ego demands it, and he has repeatedly said his goal is a single payer system – he will wait it out. The ACA is not supposed to create contentment…it is designed to become a crisis. Upon which, the government will declare that it alone can carry the burden of health care and that they alone have the capacity to alleviate the crisis. The people will be required to submit to a 100% government run health care system. There will be no private insurance and there will be two systems with the government run system: the cadillac platinum plan for government employees, elected officials and their senior staffers and some carefully selected cronies, and the yugo scrap plan that will be for everyone else. I’ve experienced first-hand a government run yugo plan in a (1st world) developed country and it is nowhere near the standard of care we have in the US at the moment. We tower above the rest of the world in so many ways. Too bad we are now on a regressive course that appears irreversible.

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