Monday, May 13, 2013

W.H. Retweets Article on Rising Insurance Costs

    Today, the White House retweeted a link to an OregonLive.com story on competition among healthcare insurers purportedly instigated by ObamaCare:
    The story is entitled "Two Oregon insurers rethink 2014 premiums as state posts first-ever rate comparison" and begins as follows:
This is what competition looks like: One health insurer wants to charge $169 a month next year to cover a 40-year-old Portland-area non-smoker. Another wants $422 a month for the same standard plan.
The new health insurance marketplace envisioned by federal health reforms doesn't formally kick in until fall. But it already is taking shape – and consumers for the first time can compare, premium by premium, identical plans by different insurers.
    Some of the insurance players in Oregon give at least partial credit to the new "marketplace" instituted by ObamaCare for lowering the projected 2014 rates for Oregon health insurance consumers:
"Posting rate comparisons company-by-company is a taste of what is to come," says Cheryl Martinis of the Oregon Insurance Division. 
Judging by the reaction, there's already an impact. 
Providence Health Plan on Wednesday asked to lower its requested rates by 15 percent. Gary Walker, a Providence spokesman, says the "primary driver" was a realization that the plan's cost projections were incorrect. But he conceded a desire to be competitive was part of it.
    However, one gets the idea that perhaps the White House retweeted the link without reading the entire article.  Further in the story comes this [emphasis added]:
The easy rate comparison is only one of the changes consumers who buy their own insurance can expect in 2014. 
Another is higher premiums in the 2014 individual market, though for many people they'll be offset by tax credits. The higher rates are because people with pre-existing conditions can no longer be denied coverage. Also, plans have to offer stronger benefits than they used to, leading to higher premiums. 
The changes have spawned much speculation, with some predicting "rate shock" for people who buy their own policies. Now consumers can see for themselves what premiums could be available, at least for certain plans. 
    This might appear to be a classic case of burying the lead.  Competition, yes, but higher rates?  And due to the Affordable Care Act?  However, the article quickly adds the saving grace that may have tipped the scales in the White House retweet decision.  Federal government income-based subsidies of the higher rates :
Meanwhile, at least half the potential customers who buy their own insurance will qualify for a sliding scale of income-based tax credits that could more than-eliminate any price hikes. Nearly 400,000 Oregonians are expected to purchase their own insurance as tax credits lure previously uninsured consumers. 
In addition to comparing insurance plans, Cover Oregon can enroll people and qualify them for tax credits. 
     So, the Obama administration pushed through a 2,800 page piece of legislation that cut consumer choice (I mean "simplified the health insurance system") and raised rates by forcing companies to accept sick customers (I mean "eliminated unfair exclusions for pre-existing conditions") and to offer benefits that not everyone wants or needs (I mean "offer stronger benefits".)  But not to worry.  The government will kick in the difference.  And lower the deficit.  And improve health outcomes.

    What could possibly go wrong?

Note:  This article first appeared at The Weekly Standard.

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