Junk Health Insurance? It's Called Obamacare

(Editor's Note: The following opinion column does not constitute an endorsement of any political party or candidate on the part of Newsmax.

What good is health insurance if most of the doctors in your area don't accept your plan?

That's a question customers on Obamacare's exchanges may be asking themselves. According to a new KFF analysis, exchange enrollees, on average, had access to only 40% of doctors in their area.

The exchanges, in other words, are failing at one of their most fundamental jobs: expanding access to quality health care. Taxpayers cannot afford to divert yet more public money to subsidizing substandard exchange plans, as Democratic presidential nominee Kamala Harris has called for.

Narrow provider networks have been the norm since the online marketplaces opened a decade ago. A study by the consulting firm Avalere found that nearly three-quarters of exchange plans in 2019 featured restrictive provider networks — and that this trend toward more narrow networks had been growing for years.

It's not difficult to see why. Obamacare put in place a long list of regulations and mandates that made it harder for insurers to control costs. These included requirements that they sell coverage to all comers regardless of health status or history and that they charge older patients no more than three times what they charge younger ones.

The law's 10 essential health benefits mandates, meanwhile, forced plans to cover a host of treatments and services regardless of whether a patient wanted or needed them.

In response, insurers turned to one of the few strategies still available for keeping costs in check: restricting provider networks. Providers may be willing to accept lower reimbursement from insurers if they know they'll have a steady stream of customers — because those customers have nowhere else to go.

Narrow networks can also act as a barrier to health care utilization. If beneficiaries can't get an appointment at an in-network doctor, or have to wait a long time for one, then insurers face less in potential claims costs.

From the patient's perspective, however, narrow networks may seem to defeat the very purpose of health coverage. Consider that, in 2024, the average monthly premium for a benchmark silver plan was $477 before accounting for subsidies — some $200 more than in 2014. The average silver deductible was more than $5,200 — $2,800 more than in 2014.

It only makes sense to spend that kind of money if it buys ready access to care. But in an alarming number of cases, patients covered by an exchange plan can't get the care they need in-network. One in five patients with a marketplace plan and 34% of sick marketplace enrollees have been forced to seek care from an out-of-network physician, according to the KFF analysis.

Narrow provider networks frequently cause patients to forgo needed care. In fact, 11% of those insured on the individual market who visited a hospital or emergency room in the last year had to skip or delay care, the KFF study found. That's compared to just 5% of patients covered by an employer-based plan.

Remarkably, Democrats don't seem to be interested in addressing the quality of the coverage for sale on the exchanges. Instead, they've continued to funnel astronomical amounts of taxpayer money toward insurers in the form of premium subsidies.

Harris has made the extension of enhanced premium tax credits — which are scheduled to expire at the end of 2025 — a major part of her pitch to voters.

These credits artificially lower what patients pay for coverage. But they don't change the fact that doctors in many places want nothing to do with exchange plans, largely because of their low reimbursements.

There are ways to genuinely expand access to physician care. Loosening restrictions on short-term health plans — as Donald Trump did during his term in the White House — is one.

Short-term plans were originally intended to fill unexpected gaps in coverage. But many people embraced them as an affordable alternative to exchange coverage. According to the Congressional Budget Office, short-term plans often "have lower deductibles or wider provider networks," than plans sold on the exchanges. That's in part because they're exempt from Obamacare's cost-inflating rules and mandates.

Democrats have condemned these plans as "junk insurance." Earlier this year, the Biden-Harris Administration finalized a rule that limits short-term plans to three months, with an insurer option for a one-month renewal. Several states — including California, New York, and New Jersey — have outlawed the plans entirely.

But if anything counts as "junk insurance," it's the overpriced, narrow-network plans sold on Obamacare's exchanges.