Wednesday, November 20, 2013

Media myths of Obamacare's 'failure'

I've been seeing different figures for the private insurance market, and those "losing" their private insurance because of Obamacare. Yesterday I quoted the figure of 19 million Americans who have individual, private health plans. Here Michael Hiltzik sets us straight [emphasis mine]:

[T]he market for individual policies is about 30 million people. Of those, more than 20 million are uninsured.For virtually all of them, Obamacare is an unalloyed blessing. The Congressional Budget Office estimates that about 81% of all individual policy-holders will be eligible for income-based insurance subsidies. The uninsured population skews poorer than the total individual market, so an even higher proportion of them are likely to be subsidized. The Affordable Care Act also forbids insurers to base the cost and availability of insurance on pre-existing conditions, which has kept millions of people out of the individual market.

What about individual policy-holders? They number somewhere between 8.5 million and 9.5 million. The vast majority of these customers - two-thirds - spend less than a year in the individual market, according to a 2004 study published in Health Affairs. The study found that most people use individual insurance to bridge between periods of coverage from employers or public programs like Medicaid. If three-quarters of the individual customers will be eligible for insurance subsidies, that leaves 2.1 million to 2.4 million Americans paying the full freight.

The last piece of the puzzle, and the murkiest, is how many of this last group will be paying higher prices for lesser coverage - the emblematic Obamacare "victims." Even if it's all of them, at most they account for less than 1% of the country.

But plainly they're not all paying more for less. We know this because the individual market is where people have been getting ripped off by overpaying for inadequate coverage - "junk" insurance in many cases. It's where premiums are driven up and coverage constrained by pre-existing conditions. Those practices are eradicated by the Affordable Care Act.

Kevin Drum of Mother Jones posits that one-third of these customers may be charged more for less, which sounds reasonable, if perhaps a little high. I've heard from dozens of readers who claim to be in that group. But my experience, which I'd guess is matched by most of my journalistic colleagues, is that most of them aren't examining their options very well. They're not calculating their costs beyond their premiums - the free services mandated by Obamacare they're not getting today, for instance. They're not factoring in the rate increases on their existing plans they've been hit with in the past, and would face again, but will be limited under Obamacare.

As I said before, what's fueling a lot of this public disappointment with Obamacare is the 149 million Americans who aren't affected by it all, who don't need the exchanges right now, yet who pass judgment on it based on ignorant or biased media reports. Also, as Hiltzik notes above, a majority of the folks in the individual market only use private insurance as a "bridge;" so they rarely keep their plans very long. And most private health plans are offered with terms of only one year anyway, then prices and conditions always change.

Hiltzik describes the group who is indeed being affected, sometimes for the worst: those whose private insurers chose not to renew their old plans with the same prices and conditions to comply with the ACA grandfathering rules, i.e. those infamous "cancelled" plans:

The bottom line is that we're down to about one-quarter of one-percent of the country being paraded around to set the agenda for everyone else - fewer than 2 million people. Compare that with the number of people who are being denied health insurance in 21 states that have refused to expand Medicaid, as the Affordable Care Act allows them to do largely at federal expense. (Four other states are still thinking it over.)

This group numbers about 5 million, and in every case they're being deprived of health coverage by Republican governors or legislatures, or both. That should tell you that the Republicans who are carrying on about Obamacare's "failure" really don't have your welfare in mind, any more than the characters hawking diet plans on late-night TV really want you to get thin.

Regardless of the political fallout, 2014 midterm elections, or Obama's popularity, Hiltzik's conclusion is spot-on:

The fact is that Obamacare is here to stay. Its customer protections are worth real money to tens of millions of consumers, and it's vastly expanding the insurance market. The politicians claiming that they're only out to "fix" a broken program are playing you for suckers, and not for the first time.

By Michael Hiltzik
November 19, 2013 | Los Angeles Times

By Jonathan Cohn
November 18, 2013 | New Republic

By Jonathan Chait
November 18, 2013 | New York Magazine

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