NCPA - National Center for Policy Analysis


July 19, 2010

As the Obama administration begins to enact the new national health care law, the country's biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals, says the New York Times. 

The plans, being tested in places like San Diego, New York and Chicago, are likely to appeal especially to small businesses that already provide insurance to their employees, but are concerned about the ever-spiraling cost of coverage, says the Times: 

  • Large employers are already starting to show some interest, and insurers and consultants expect that over time, businesses of all sizes will gravitate toward these plans in an effort to cut costs.
  • The tradeoff, they say, is that more Americans will be asked to pay higher prices for the privilege of choosing or keeping their own doctors if they are outside the new networks.
  • That could come as a surprise to many who remember the repeated assurances from President Obama and other officials that consumers would retain a variety of health care choices.
  • Companies may be able to reduce their premiums by as much as 15 percent, the insurers say, by offering the more limited plans.  

Many insurers also expect the plans to be popular with individuals and small businesses who will purchase coverage in the insurance exchanges, or marketplaces that are mandated under the new health care law and scheduled to take effect in 2014. 

Tens of millions of everyday Americans will buy their coverage through those exchanges, a vast pool of new customers, including many of the previously uninsured, whom insurers expect will be willing to accept restrictions to get a better deal, says the Times. 

Source: Reed Abelson, "Insurers Push Plans That Limit Choice of Doctor," New York Times, July 17, 2010. 

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