Obamacare? Let CNBC Explain…

President Barack Obama has passed his landmark healthcare reform law. It’s referred to by several names—the Patient Protection and Affordable Care Act, or just the Affordable Care Act—but even the president uses the critic’s name: Obamacare.

Sure, the name is simple. But this is a complicated law. It wants to tackle two problems: first, it seeks to provide affordable health insurance to just about every American, and second, it wants to slow down the rate of inflation of healthcare costs, which account for nearly one-fifth of America’s economy (you saw John Green’s brilliant video, right?).

Okay, insurance for everyone sounds nice. We’re not going to argue with that sentiment, although the methodology might backfire. However, this second point sounds ludicrous.

“Add red tape to curb American healthcare costs? That’s like pouring gasoline on a fire because it’s liquid.” – @AtlasMD [CLICK TO TWEET]

Oh, and “the ACA will cost the government $1.36 trillion to implement over the next decade, according to estimates by the Congressional Budget Office,” says CNBC. Excellent. That’s just another tab that’s going to have to be picked up by someone, most likely someone who works and pays taxes.

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NPR Breaks Down Obamacare’s Effect on Insurance Rates

NPR published an article reviewing introductory rates on policies offered through state-run insurance exchanges. The report examined 36 different states. So what’s the verdict? A resounding “it depends.” In Oklahoma, premiums are going for as low as $96/month. Meanwhile, in Wisconsin, the lowest rate on a bronze plan is well over $300. The reporter echoed our direct care mantra, saying, “Competition equals lower prices.” They explained how in regions with only one insurance company selling through the subsidized exchange, the average monthly premium for a 21-year-old buying the lowest cost bronze policy is $186, before any subsidies are applied. However, in regions with 10 or more rival carriers, the average cost is $132 or less.

How will Obamacare’s varying premium rates affect direct care practices?

Actually, there are two wins happening. If you’re a doctor looking to move to open a cash-only clinic, you’ll bode well in regions with only one insurance plan offered through the exchange. Lower competition tends towards higher insurance rates, meaning that wrap-around plans and your direct care offering can add tremendous value. Secondly, in areas with fewer insurance plans offered on the exchange, there is another effect: increased premiums for existing subscribers. In this case, because of the lack of competition, and the fact that Obamacare is forcing insurance companies to expand their offerings, rates might reach an exorbitant level for the subscriber. This is another patient who would benefit greatly from switching to a wrap around plan (remember, Obamacare means that insurance plans can’t raise their rates for pre-existing conditions) and enrolling in your direct care clinic.

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