Thursday, August 25, 2016

Big Obamacare Rate Increases Don't Reflect What People Actually Pay––Wrong!

How many people in the individual health insurance market don't get a subsidy to pay for their health insurance, or wouldn't be eligible for one it they did buy it?

Here is what an Obama administration spokesperson said yesterday about all of the big 2017 Obamacare rate increases: "Headline rate increases do not reflect what consumers actually pay," said Kathryn Martin, acting assistant secretary for planning and evaluation at the Department of Health and Human Services.

What she is once again referring to is that 85% of those getting subsidies could get their rate increases eliminated or blunted by the subsidies. It is worth pointing out that the consumer only avoids the big increase if they are in, or move to, the lowest or second lowest cost Silver Plan.

Staying with a higher priced plan they might now be in will not avoid the increases.

And, once again, the administration doesn't tell us that moving to a lower price plan may require higher deductibles and co-pays and more limited provider networks.

But more importantly, why does this administration, and so many Obamacare supporters that parrot this line, continue to ignore the many millions of people who do not get a subsidy and have no choice but to take the full whack from these rate increases if they want to stay covered?
The administration did appear to accomplish this week's spin goal of getting a message out that Obamacare is doing just fine. Here are some of the headlines driven by the administration's press briefing as they appeared in Kaiser Health News today under the heading: "HHS Analysis Says Subsidies Will Help Buffet Consumers From Marketplace Turmoil:"
  • The Hill: "White House: Most Obamacare Users Will Be Shielded From Premium Spikes"
  • Modern Health Care: "HHS Says 2017 Obamacare Plans Will Be Affordable Despite Insurer Exits"
  • Morning Consult: "HHS Report: Most Marketplace Consumers Will Have Affordable Coverage Options"
  • Dallas Morning News: "HHS Department: Fear Not, Obamacare Will Remain Competitive"
How many people in the individual market do not get a subsidy––and are not shielded from these increases?

Also this week, Mark Farrah Associates, an insurance industry data aggregator and web publisher, did take a look at that question. They looked at all of the individual health insurance regulatory filings in each of the states.

Here is what they found:

As of February 2016, 7.5 million people bought individual coverage outside the exchanges and therefore did not get an exchange subsidy. They reiterated the administration's claim that 12.7 million people bought coverage in the exchanges as of last February.

In fact, by March, only 11.1 million people had completed/paid their enrollments with only 9.4 million getting a subsidy and 1.7 million not getting one.

Adding the 1.7 million not getting a subsidy on the exchange to the 7.5 million off the exchange not being subsidized as of February, there are apparently about 9.2 million people in the U.S individual health insurance market that do not get a subsidy!

Now, some of these 9.2 million could be in grandfathered plans soon to be terminated, or even in limited medical plans still on the books. But any new policy these people would have to buy would have to be Obamacare compliant in order for them not to face the fine.

While this estimate serves to approximate what the market looks like, it is not definitive.

You would think with all of the endowment money the likes of The Commonwealth Fund or The Kaiser Family Foundation has someone would have attempted to find out how many people are out in the cold having to pay the full premium, deductibles, and rate increases for their coverage. After all, how many times have you seen a study, poll, or report from these folks supportive of the Affordable Care Act's accomplishments––particularly the good the law has done to expand coverage for the poor? Are they also not interested in the middle class?

And of course, this data only looks at the people who have bought a policy. While we know that only about 40% of the subsidy eligible have bought a policy, how many of those not subsidy eligible are still without any coverage?

Arguments referring to the 85% of those in the exchange getting a subsidy, in the narrowest sense, are correct. They are also incredibly disingenuous.

But you wouldn't know that reading these headlines.

My comments about this today on CNBC


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