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Obamacare Isn’t Cutting Doctors’ Pay Obamacare Isn’t Cutting Doctors’ Pay

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Obamacare Isn’t Cutting Doctors’ Pay

Obamacare Isn't Cutting Doctors' Pay

The latest fuss over Obamacare seems to be the accusation that the law is cutting doctors' payments, perhaps forcing them to refuse to see patients who are insured through Obamacare. But this isn't necessarily an Obamacare issue.


The Affordable Care Act does cut some Medicare payments to health care providers. But the plans sold through the Affordable Care Act's exchanges are private insurance plans. They are not run by the government, and therefore the government does not decide how much those plans will pay doctors. Insurance companies decide what they're willing to pay--and yes, insurers have cut their rates for some plans sold through the exchanges. Why? Because they want customers.

When insurers pay doctors less, they can charge lower premiums, and that helps entice people to sign up for their plans. This basic piece of business strategy applies in all health care markets--Obamacare or not. Doctors will always want to be paid more (who doesn't?), and insurance companies will always want to keep their costs as low as possible (what industry wouldn't)?

Some medical groups say insurers have cut their rates without telling them. That's not good, clearly. Doctors should at least have a chance to reject rates they think are too low. But the rates themselves are the result of business decisions that doctors and insurance companies have to make about each other, and the underlying trade-offs in that relationship haven't really changed.


Sam Baker

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