Tuesday, June 4, 2013

Yes, some will pay more for health care under ACA, but...

Good article from Ezra Klein's Wonkblog that address Avik Roy's critical column on the "affordability" of the  Affordable Care Act, otherwise known as "Obamacare." Roy focuses on the increased cost that a very specific and pretty small group (young and healthy individuals too old to stay on their parents plans, not accessing insurance from an employer, etc...) will pay under the exchanges. This is historically the cheapest group to insure. Especially with the utilization of "mini-meds" plans which is the sort of health insurance companies like fast food restaurants offer. Low premiums, high deductable and low coverage caps which means sky high out of pocket. They also typically don't cover very much either.

The ACA now requires all health insurance plans to meet minimum standards, so the bang for the buck is also considerably bigger as well as yes, in some cases, the price tag.

From Klein:

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.
Read both articles, and this post from Aarron Carroll at the Incidental Economist and come to your own conclusion. Roy engages in some pretzel logic to come to his. If he compares apples to apples I'll listen because all in all, he's a smart guy and one of the voices we should be considering, not mocking, from the right. He didn't have to compare the costs of pre ACA health care plans to make the case that yes, for some people (young, healthy, too old for parents plan, etc.) they WILL probably pay more than they have been.

From Dr. Carroll's piece:

So I’ll state this for the record: I think that some young, healthy people are getting the shaft right now. Not all, because some can still get on their parents’ plans. Some can still still buy catastrophic insurance if they want. Some will get Medicaid. Some will get subsidies. But if you’re a young, healthy 28 year old male who makes 400% of the poverty line, and you currently have really cheap insurance, it’s likely your rates are going up.
OK? I freely admit that my goal in health care reform was not to protect the status quo for young, healthy males. That’s wasn’t my goal for reform.
They will have to pay a bit more. The tradeoff is that if they don’t stay healthy, they’ll still be able to get insurance for the same price. If they get sick, there will no longer be any lifetime or annual limits. When they get older, they’ll still be able to get a plan, and it won’t cost nearly as much as it otherwise would have.
I think these tradeoffs are acceptable. You may not; that’s why we live in a democracy. But this was the plan. The law has not been rewritten. This blog, and many others, have been consistent in what they say about it. There is no “gotcha” here. The fact that young, healthy people are seeing a rise in premiums (without subsidies) as they transition from cheap, bare bones insurance to more comprehensive insurance is not a surprise. It’s not new, horrifying data about the failure of Obamacare. It’s an expected, and known, tradeoff to get a better healthcare system overall.





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