Obamacare: California Fudges The Math - Rates up 64-146%

[Guest]

Some supporters of Obamacare are willing to try every trick in the book to convince a skeptical public that the law may actually lower health insurance premiums.

Case in point: Covered California, the state-run health insurance exchange, yesterday heralded a conclusion that individual health insurance premiums in 2014 may be less than they are today. Covered California predicted that rates for individuals in 2014 will range from 2 percent above to 29 percent below average small employer premiums this year.

Does anything about that sound strange to you? It should. The only way Covered California's experts arrive at their conclusion is to compare apples to oranges -- that is, comparing next year’s individual premiums to this year’s small employer premiums.

They’re making this particular comparison, they explain, because they believe that the marketplace for individually purchased insurance will look like the marketplace for small employer-purchased insurance next year. For example, the state already requires insurers to issue policies to all comers in the small employer market. Premiums are therefore higher today for small employers than for individuals purchasing coverage on their own.

What this means, however, is that Covered California is creating for itself a very favorable and already higher baseline from which to compare next year’s individual health insurance premiums. That’s how they’re able to create the appearance that Obamacare’s reforms will lower individual premiums.

To put it simply: Covered California is trying to make consumers think they’re getting more for less when, in fact, they’re just getting the same while paying more.

Yet there are many plans on the individual market in California today that offer a structure and benefits that are almost identical to those that will be available on the state’s health insurance exchange next year. So, let’s make an actual apples-to-apples comparison for the hypothetical 25-year-old male living in San Francisco and making more than $46,000 a year. Today, he can buy a PPO plan from a major insurer with a $5,000 deductible, 30 percent coinsurance, a $10 co-pay for generic prescription drugs, and a $7,000 out-of-pocket maximum for $177 a month.

According to Covered California, a “Bronze” plan from the exchange with nearly the same benefits, including a slightly lower out-of-pocket maximum of $6,350, will cost him between $245 and $270 a month. That’s anywhere from 38 percent to 53 percent more than he’ll have to pay this year for comparable coverage! Sounds a lot different than the possible 29 percent “decrease” touted by Covered California in their faulty comparison.

While Covered California acknowledges that it’s tough to compare premiums pre- and post-Obamacare, at the very least, it could have made a legitimate comparison so consumers could fairly evaluate the impacts of Obamacare.

Unfortunately, what California authorities have done here is all too common in efforts to make Obamacare look like a good deal for American consumers. In recent weeks, Democrats have pointed to projections from some of the country’s most heavily regulated states, including Vermont and Maryland, to argue that premium increases next year won’t be as bad as people think. But many of these states -- including California -- already have in place some or all of the reforms that Obamacare mandates.

To see the true impact of the law, we’ll have to wait for less-heavily-regulated states to reveal what next year’s premiums will look like. Let’s hope they don’t resort to the same misleading tactics that California authorities did.

http://www.bloomberg.com/news/2013-05-24/california-fudges-the-math-on-obamacare.html

[_Brackite]

However, BCSpace with the Democrats having a super-majority in the California State Legislature and a caring Democratic Governor there, it looks like that the poor people of California are going to get their Dental care insurance back. Oh wait...

But the governor flatly said there was very little money available to significantly restore cuts made in social services and school funding in recent years to balance the budget. For example, he included no funding to restore adult dental care.

"The money is not there," he said. "Anyone who thinks there is spare change around has not read the budget."

Link: http://www.latimes.com/news/local/polit ... 5387.story

[_bcspace]

Heaven Forbid!

[_bcspace]

Obamacare To Increase Individual Health Insurance Premiums By 64-146%

It's interesting to note that the Obama Administration and the Democrats piled on to Anthem Blue Cross for a 39% rate hike for some groups in 2010 blaming it on greed. Shortly thereafter, it was revealed that the company's revenues had dropped 11% in 2010. The depth of liberal hypocrisy, incompetence, and economic understanding is breathtaking.

[_Analytics]

Obamacare To Increase Individual Health Insurance Premiums By 64-146%

It's interesting to note that the Obama Administration and the Democrats piled on to Anthem Blue Cross for a 39% rate hike for some groups in 2010 blaming it on greed. Shortly thereafter, it was revealed that the company's revenues had dropped 11% in 2010. The depth of liberal hypocrisy, incompetence, and economic understanding is breathtaking.

What is truly breathtaking is is irony of you saying such things--especially after posting links to such jaw-droppingly dishonest articles.

[_Analytics]

So, let’s make an actual apples-to-apples comparison for the hypothetical 25-year-old male living in San Francisco and making more than $46,000 a year. Today, he can buy a PPO plan from a major insurer with a $5,000 deductible, 30 percent coinsurance, a $10 co-pay for generic prescription drugs, and a $7,000 out-of-pocket maximum for $177 a month.

According to Covered California, a “Bronze” plan from the exchange with nearly the same benefits, including a slightly lower out-of-pocket maximum of $6,350, will cost him between $245 and $270 a month. That’s anywhere from 38 percent to 53 percent more than he’ll have to pay this year for comparable coverage! Sounds a lot different than the possible 29 percent “decrease” touted by Covered California in their faulty comparison.

This is incredibly dishonest for multiple reasons.

First, the assertion that he is offering an apples-to-apples comparison with this hypothetical man is a lie. It isn’t apples-to-apples because currently, a hypothetical 25-year-old male living in San Francisco can’t purchase a plan for $177 a month. This is because this rate is only available to the super-healthy 25-year old men—for all others, the insurance company either charges much more, or declines to offer coverage altogether.

Second, the test case was hand-selected because it offers the worst results—if the author would have done the same comparison with a 64-year old man, or even a 25-year old woman, the individual would see a happy decline in premium.

Most fundamentally, this totally disregards the entire point of Healthcare reform. President Obama didn’t get up and say, “Healthy 25-year old men are paying way too much for individual health insurance. We need to reform healthcare to lower their insurance costs.” Rather, the problem was that insurance was either too expensive or unattainable for the working poor and for people who couldn’t pass medical underwriting.

The truth of the matter is that Healthcare reform does entail creating winners and losers. The winners include the poor, the uninsured, the uninsurable, and the old. The losers include healthy 25-year old males who purchase insurance and few others. Pointing to the fact that a hand-picked single cohort gets hurt and declaring it proves the program is a failure is the epitome of stupidity at best and dishonesty at worst.

[_bcspace]

What is truly breathtaking is is irony of you saying such things--especially after posting links to such jaw-droppingly dishonest articles.

As opposed to what...the peoples Republic of California? The L.A. Times? HuffPo? Give me a break! They were the ones who fudged the math in the first place.


Let's start with an unthinking L.A. Times notion:

Of course, as the L.A. Times noted, there’s a trade-off here: The coverage through the exchange is generally more comprehensive—and, as a result, also more expensive.

Obamacare’s defenders seem to think it’s a worthwhile trade-off. Yes, individual market consumers will be paying more than they might today, but insurers will have to sell policies to everyone, will be limited in how they can price based on health history, and will have to include a variety of essential benefits in the process.

Lower-income individuals, meanwhile, will be insulated from the full impact of those new rates thanks to the law’s premium subsidies. Yet as health policy consultant Robert Laszewski points out, what that really means is that a big chunk of Obamacare’s cost increases will fall on taxpayers. (And remember, an estimated 40 percent of people buying insurance through the exchanges won’t get subsidies.)

There are other trade-offs too: As Laszewski also points out, health insurers are attempting to mitigate the costs imposed by the benefit requirements by offering narrow-network plans that limit the scope of providers covered. There’s nothing wrong with those sorts of offerings, if insurers want to sell them and consumers want to buy them, but what Obamacare appears to be doing is giving both consumers and insurers a rather big push toward those sorts of provider-limited plans. Essentially, it’s making the choice for them.

Fundamentally, that’s a big part of what Obamacare is about: making choices for individuals, for businesses, and for the health care sector. And so under Obamacare we’ll probably get more coverage (though perhaps not as much as supporters hope, especially at first), more insurance benefits (at least on paper), and (at least in theory) more accessible coverage. But don't be fooled into thinking it won't come without higher costs—for individuals, for businesses, and for the public. Obamacare both makes those choices and expects people to pay for them.

California Regulators Hide Obamacare Rate Shock With Misleading Comparison

In other words, costs more for less and less availability as per Econ 101. So Analytics argument goes out the window rather easily and what else is easy to see is that virtually every promise made to sell Obamacare has been or will be broken.

[_MeDotOrg]

Here's an interesting article about comparing apples to oranges:

Imagine you went to Best Buy and found a great deal on a plasma television set. I want to be clear here: You didn’t find a great television set. This television set is actually a bit crummy. The picture is fuzzy. Consumer Reports says it breaks down a lot and it’s expensive to fix. But it’s really cheap. The price tag reads $109.

When you take it to the counter, the saleswoman tells you that the set will actually cost you $199. And count yourself lucky, she confides in a conspiratorial whisper. There are customers whom Best Buy won’t sell it to at any price. You ask her which customers those are. The ones who need the TV most, she replies.

So here’s the question: Does that television really cost $109?

Best Buy, of course, would never do this to you. If they say you can buy a television set for $109, you can buy it for $109. Plus, they’re handsome, and their customer service is great, and I hope they advertise in The Washington Post forevermore, amen.

But this is actually how the individual health-insurance market works. And understanding why is crucial to understanding a lot of what you’re going to read about health reform in the next year.

Last week, California released early information on the rates insurers intend to charge on the new insurance marketplaces — known as “exchanges” — that the state is setting up under Obamacare. They were far lower than anyone expected. Where analysts had anticipated average premiums of $400 to $500, insurers were actually charging $200 to $300. “This is a home run for consumers in every region of California,” crowed Peter Lee, director of the state’s exchanges.

The Affordable Care Act’s critics saw it differently. Avik Roy, a conservative health writer at Forbes, said Lee was being “misleading” and that “Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.” Obamacare, he said, would trigger “rate shock,” the jolt people feel when they see higher rates. That doesn’t sound like a home run at all.

Who’s right? In typical columnist fashion, I’m not going to tell you just yet. But stick with me, and you’ll be able to parse the next year of confused and confusing Obamacare arguments with ease.

Here’s the first thing to know: We’re talking about a small fraction of the American health-care system. This isn’t about people on Medicare or Medicaid or employer-based insurance. It’s about people joining Obamacare’s insurance exchanges. That’s people who buy insurance on their own now, as well as some of the uninsured. In 2014, 7 million people, or 2.5 percent of the population, is expected to buy insurance through the exchanges. By 2023, that will rise to 24 million people, or 8 percent.

So we’re talking about a small portion of the market. Worse, we’re talking about that small portion of the market all wrong.

Roy got his 146 percent by heading to eHealthInsurance.com, running a search for insurance plans in California and comparing the cost of the cheapest plans to the cost of the plans being offered in the exchanges. That’s not just comparing apples to oranges. It’s comparing apples to oranges that the fruit guy may not even let you buy.
Roy got his 146 percent by heading to eHealthInsurance.com, running a search for insurance plans in California and comparing the cost of the cheapest plans to the cost of the plans being offered in the exchanges. That’s not just comparing apples to oranges. It’s comparing apples to oranges that the fruit guy may not even let you buy.

I ran the same search Roy did. I looked for insurance in Irvine, Calif. — my home town. The average monthly premiums of the five cheapest plans is $114. So I took the middle plan, HealthNet’s IFP PPO Value 4500. It’s got a $4,500 deductible, a $2,500 deductible for brand-name medications, huge co-pays and a little “bestseller” icon next to it. And it’s only $109 a month — if they’ll sell it to you for that price.

That’s the catch, and it’s a big one. Click to buy the plan and eventually you’ll have to answer pages and pages of questions about your health history. Ever had cancer? How about an ulcer? How about a headache? Do you feel sad when it rains? When it doesn’t rain? Is there a history of cardiovascular disease in your family? Have you ever known anyone who had the flu? The actual cost of the plan will depend on how you answer those questions.

According to HealthCare.gov, 14 percent of people who try to buy that plan are turned away outright. Another 12 percent are told they’ll have to pay more than $109. So a quarter of the people who try to buy this insurance product for $109 a month are told they can’t. Those are the people who need insurance most — they are sick, or were sick, or are likely to get sick. So, again, is $109 really the price of this plan?

Comparing the pre-underwriting price of this plan to those in Obamacare’s exchanges is ridiculous. The plans in Obamacare’s exchanges have to include those people. They can’t turn anyone away or jack up rates because of a history of arthritis or heart disease.

They also have to offer insurance that meets a certain minimum standard. Under Obamacare, for instance, the out-of-pocket limit for someone making 100 to 200 percent of the poverty line is $1,983. Under the Value 4500, you could spend up to $9,500 before the out-of-pocket limit kicked in. Obamacare also has subsidies for people making up to four times the poverty line. The poor pay next to nothing. The rich pay full freight.

“We as a society have never really said here’s what reasonable insurance is,” says Larry Levitt of the Kaiser Family Foundation. “It’s just been anything goes. For the first time they’re setting a minimum about what reasonable insurance should be.” They’re also setting a minimum about who should be able to get it, and at what cost. Now it really will work like Best Buy, where the price on the tag is the price everyone actually pays.

Some people will find the new rules make insurance more expensive. That’s in part because their health insurance was made cheap by turning away sick people. The new rules also won’t allow for as much discrimination based on age or gender. The flip side of that, of course, is that many will suddenly find their health insurance is much cheaper, or they will find that, for the first time, they’re not turned away when they try to buy health insurance.

That’s why the law is expected to insure almost 25 million people in the first decade: It makes health insurance affordable and accessible to millions who couldn’t get it before. To judge it from a baseline that leaves them out — a baseline that asks only what the wealthy and healthy will pay and ignores the benefits to the poor, the sick, the old, and women — well, that is a bit shocking.

[_Analytics]

What is truly breathtaking is is irony of you saying such things--especially after posting links to such jaw-droppingly dishonest articles.

As opposed to what...the peoples Republic of California? The L.A. Times? HuffPo? Give me a break! They were the ones who fudged the math in the first place.

As the Ezra Klein article that MeDotOrg quoted explains, Covered California did an honest and reasonable job of describing the rates that the private market is offering on its exchange—it didn't "fudge the math." Comparing the new individual rates in aggregate to previous small-group rates (as Covered California did) is a reasonable approach to measuring the effectiveness of the ACA. Comparing old underwritten rates of healthy 25-year old males to the new rates is extremely misleading.

Again, nobody promised that the individual insurance rates for healthy 25-year old males would go down under the ACA. What was promised was that coverage would be more broadly available—both to the working poor and to the previously uninsurable. As the system that Mitt Romney signed into law in Massachusetts has already demonstrated, the ACA will in fact do those things.

[_bcspace]

Again, nobody promised that the individual insurance rates for healthy 25-year old males would go down under the ACA.

That's a lie and all one has to do is google to see how it was sold. You start by noting the actual name includes the word "Affordable". Now what do you think the average voter or typical low information Democratic legislator who knows he/she must vote on it to see what is in it will think? The average Californian looks to have their rates doubled IF they keep their existing insurance. The reality is that they will shift to less coverage to keep costs down. Sorry, but you live in a low information newspeak propaganda world.