WABE: Obamacare Rates “lower than earlier forecast”, Forbes: HHS Data “A Ruse”

WABE enthusiastically reports on a press release from HHS saying health insurance premiums will be “lower than earlier forecast.”

According to the federal Department of Health and Human Services, Georgia’s average premium for a mid-level “silver” plan will be $304 a month. A bronze plan will average $265. Those numbers represent a mean average for all ages in all regions, before federal subsidies kick in.

This report set off celebrations across the left side of the Twitterverse and at the Georgia Democratic HQ.

However, as Avik Roy reports in Forbes…

HHS compared what the Congressional Budget Office projected rates might look like—in 2016—to its own findings. Neither of those numbers tells you the stat that really matters: how much rates will go up next year, under Obamacare, relative to this year, prior to the law taking effect.

Former Congressional Budget Office director Douglas Holtz-Eakin agrees. “There are literally no comparisons to current rates. That is, HHS has chosen to dodge the question of whose rates are going up, and how much. Instead they try to distract with a comparison to a hypothetical number that has nothing to do with the actual experience of real people.”

Forbes has a map showing changes in premiums across the nation, indicating an average increase of 24% for those purchasing insurance on their own (the people the exchanges are designed to help). The data comes from actual premiums compared to prior year premiums.

Of course people will immediately point out that health insurance rates were increasing prior to Obamacare. This is indeed true, and points to the need for real reform, not a massive regime with all the unintended consequences we’re seeing now. Additionally, proponents of the ACA have long said premiums would come down and clearly that isn’t true.

So if premiums are going up not down, and some are uninsured because they can not afford health insurance at current rates, explain to me how this new law helps solve the problem?

30 comments

  1. According to the AJC calculator, the most someone on a silver plan will pay who is 33 years old is $229/mo. Guessing bronze will be around $195. That’s unsubsidized.

    There are winners and losers in every policy change. Some people on the individual market with excellent luck (not born with a condition or developed one randomly like cancer) will see higher premiums. Many who can’t afford currently will get a subsidy and can now afford coverage, or who can’t get coverage because of a condition at any price can now buy it.

    And the higher cost for some people – well just compare that to what businesses and small businesses are paying for group plans that have guaranteed renewal. If I got healthcare through my small business group, it would cost the company somewhere in the $400-$500 range. That’s because they take our small group of 10 people and charge us through the ass once someone gets cancer or an expensive surgery. And the way small group insurance currently works, they have to give everyone the same price. Unsustainable.

    Soon we’ll be able to go on a small business exchange where policies are community rated by age and smoking status, and we’ll be able to pay a rate similar to the individual rates, plus I’ll have the option of 5 or 6 different plans.

    And to my Republican friends: wish you had gotten serious about healthcare reform before Obama did it. And that includes during the time Obamacare was being debated. Just look at how he caved on the stimulus, on the public option etc. You’re smoking crack if you don’t think Republicans could have had serious input into the bill if they’d just come to the table.

    • John Konop says:

      Chris that is a very good point, a proper comparison would to look at individual rates and small company verse Obamacare…….But that also make my point, we need a self insured pool option like large companies have…….That is why their cost is about 20% less. That option is not in the exchange, or the rate would be less…….We could set it up statewide under the new rules via our own exchange…..

      • I’d personally like to see the ability to use an HSA to buy a higher deductible plan over time. For example – if I start an HSA with a high deductible and don’t spend any of my HSA money for a few years, I should be able to buy a true catastrophic plan and use my HSA money to self insure the cheaper stuff – this is closer to how a business plan really works on a macro level.

        Of course, that isn’t for everyone, and if I have that HSA and then get cancer, I’d probably like the option of buying into a Gold or Diamond plan in future years and abandon the HSA. The exchange lets that happen. Yes – some prices will be more than on the currently distorted individual market. Deal with it people.

        And excellent point about Georgia’s options – the law gives states great leeway to opt out and do their own thing – they just have to make sure that affordable coverage is available for 98% of the population or whatever. Vermont is looking at single payer. If affordable universal coverage is truly the Republicans’ plan, why can’t they come up with a workable, passable framework in any of the many states they control like Georgia?

  2. George Chidi says:

    It’s worth mentioning that Avik Roy has been spectacularly wrong in the past. Deeply disingenuous at best, deliberately deceptive at worst.

    He essentially lied about what rates were doing in California three months ago, using apples-to-oranges comparisons to make a larger point. He’s on the libertarian Manhattan Institute payroll — his livelihood depends on returning results that attack Obamacare.

  3. NoTeabagging says:

    Health Care Reform, no mater how it is branded, will not help citizens if there is no real “Insurance” reform. Warm and fuzzy mandates like “no lifetime cap on benefits” is no good if you cannot collect on those benefits. Currently Insurance companies drop you like a leper once you actually have a medical condition. They can and do raise individual rates once you actually need the benefits due to accident or medical condition. Insurance premiums skyrocket so that a person with a serious medical condition, presumably not able to work, is forced to drop the insurance because they can’t pay. Good luck collecting on that lifetime “nop cap” benefit.

    We need insurance reform that allows people to receive benefits and not be cancelled because they can’t work and can’t pay premiums.

    The scam is insurance companies raise your individual rates to recover what they paid you in benefits.

    Personally, I would like to see a system that requires insurance companies to lock in rates for long time subscribers. Let’s say you’ve paid premiums for 5-10 years. Your rate should be locked as long as you stay with the same company and keep same plan. No fair tricking customers into a similar rebranded plan and making them start the clock over on the new plan rate. Long time customers should receive discounted rates. Some supplemental policies do this already.

    • DavidTC says:

      Currently Insurance companies drop you like a leper once you actually have a medical condition.

      Which they no longer will be able to do under the ACA.

      They can and do raise individual rates once you actually need the benefits due to accident or medical condition.

      Which they no longer will be able to do under the ACA.

      This is because, under the ACA, there _is_ no such thing as ‘individual rates’.(1) You buy a plan on an _exchange_, where they are _required_ to allow everyone to buy a plan, and only ways they are allowed to vary in prices between people is by age. And even there, they can only vary by 300%, i.e., they can only charge the highest paying age bracket (I.e, the elderly) three times as much as the youngest one.

      1) Well, okay, there _is_ still such a thing, in theory nothing stops insurance companies from selling individual insurance, but no one’s going to be buying insurance that way, as the exchanges are _already_ lower in cost. Either their business will provide it, or they’ll buy it on the exchange.

      You know, I rather wish that, before people were allowed to comment here about ‘Obamacare’, they were required to take a very simple quiz about what, exactly, ‘Obamacare’ does.

      • seekingtounderstand says:

        David: They can’t drop you if you get sick, but that doesn’t mean you get care.
        ACA focuses on Wellness care and denies sick people and old people. Doctors will not tell you because they are being paid under “money saved”.
        They “take an aspirin” and go die approach.
        The time and effort we all will have to put in to take care of our families health care will now explode.

  4. Stefan says:

    1) Here’s the actual WH release, with tables! http://www.whitehouse.gov/sites/default/files/docs/marketplace_premiums_ib_final.pdf

    2) The Forbes data, even if correct, is being used incorrectly.. You cannot average the $140 (147%) increase in North Dakota with the $140 decrease (-29%) in New York and suggest costs have gone up 110%. Note, if you average all of the % changes, you get his final number. That’s just dumb.

    3) His numbers aren’t even correct. He is comparing a base plan against a higher coverage plan. He could compare it against the catastrophic plan cost, but he chose not to do that. That’s like going to a new car dealer and asking if the cars are more expensive than your current 1985 Honda Civic.

    4) He only has data for 14 states.

  5. Harry says:

    I predict not too many young and middle-aged, middle class healthy people will be voting Democrat in the future.

  6. seenbetrdayz says:

    This sounds a bit like the ‘not raising spending as much, is a cut’ tactic we see from Washington so much.

    Let’s say I predict that insurance premiums will go up 5,000%, and they end up only going up 4,999%. Some people would have to be awfully desperate for a silver lining if they’ll take that to be a positive outcome.

    • George Chidi says:

      Fair point, actually.

      I’m a grudging supporter of the ACA — I personally think single-payer is the more sensible way to go, and the lack of a public option was kind of dumb, among other complaints — but even I recognize that the argument that the ACA is holding down rate increases isn’t supported by the facts. Rate increases have slowed, but that’s more correctly attributable to increasing numbers of people coming out of the insurance pool, either because they’re Medicare eligible or because they’re not working.

      Time will tell.

      • seekingtounderstand says:

        George: Costs will go down because people won’t go as much due to not trusting government health care. DMV style offices with crappy doctors and nurses (unionized) who do not give a ……about you.

        The rich will just go find the best and their lives will continue on as they always are.

        • benevolus says:

          Except it’s the same insurance companies offering the same policies tweaked to meet minimums, still collecting premiums, still sending you to the same doctors.

          You are hopeless. And I mean that in more ways than one.

  7. DavidTC says:

    Average rates, by definition, have gone down, and I can easily prove it.

    First, take any person you want. Any person whose rates have gone up. I’m letting you pick the person to average with them. In fact, pick fifty.

    Until Obamacare takes effect, they will not sell me insurance. And thus the cost of my acquisition of health insurance is infinite.

    So you add my infinite to whatever these other person were paying, and, as you can see, the average person paid an infinite amount of money pre-Obamacare for insurance. (Infinity divided by fifty is, of course, still infinity.)

    After the ACA goes into effect, the average cost will be some finite number, which by basic math must result in a lower average.

    Incidentally, that means before Obamacare, health insurance spending in this country was infinite, whereas the amount of health care provided was finite, which makes us _inconceivably_ inefficient at providing health care compared to other countries.

    • saltycracker says:

      When denied, your cost of medical insurance is a finite zero, your personal cost is finite to bankruptcy. Everyone insured or uninsured being covered drives costs approaching infinity. Your finiteness will drive averages up.

  8. seekingtounderstand says:

    Everyone assumes that they new health care will be what we have been use to…………….
    but its not. Its styled to operate like the DMV, no frills with unionized workers.

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