Wednesday, April 13, 2016

ObamaCare premiums increased 4%, because Americans shopped for a better deal on the Exchanges.

I’ve been reading massive amounts of misinformation, from the Wall Street Journal to the Business Insider, about ObamaCare's supposed huge premium increases. Every one of these articles falsely portrays insurers as having an important roll in our nations health care system, which they do not. They're even crying alligator tears over insurers dwindling profits. 

The ghoulish idea that business should make a profit on human pain and disease is at the heart of the Republican free market health care plan.

In an attempt to straighten out the facts once and for all, I found this accurate report from Huffington Post's health care reporter Jonathan Cohn. Here’s the shortened version:
If you follow the news or listen to the Republican presidential candidates, then you’ve probably heard that premiums for some Affordable Care Act plans went way up last year.

But now the Obama administration is saying that, for the vast majority of people buying coverage through, premiums are only 4 percent higher than they were last year.

Approximately 9.7 million people got insurance through this year. 

85 percent of consumers got at least some assistance. They are the ones who, on average, are paying just 4 percent more for their insurance than they were last year. 

For that small portion of consumers not eligible for assistance, and paying full price, premiums this year went up by more — 8 percent, to be precise. 

But by historical standards, that’s hardly outrageous. In the years right before passage of the Affordable Care Act, the average annual increase for individual coverage was more than 10 percent, according to research by MIT economist Jonathan Gruber and the Commonwealth Fund.
 So why all the fuss about skyrocketing premiums now? One reason is that Obamacare critics don’t mention the law’s tax credits, which can discount the price of coverage by hundreds or even thousands of dollars a year. In addition, the numbers in the HHS report represent averages. They include some big premium hikes (which the law’s critics hype) as well as some reductions (which those critics largely ignore). 

But there’s another big reason: More than 40 percent of returning customers shopped around, dropped the plans they had in 2015, and decided to pick new ones for 2016.

You could argue, credibly, this is what competition is supposed to look like — with insurers vying for market share, consumers hunting for bargains, and the whole process putting pressure on the providers of medical care to lower their prices. In the old days, most people couldn’t shop for plans, because lack of standard benefits made it difficult to compare plans and insurers didn’t want to cover people with serious medical problems (Republicans want to go back to this-jp). But while some insurers have threatened to withdraw from Obamacare marketplaces, and one carrier, UnitedHealth, recently pulled out of Arkansas and Georgia, others remain committed to the program. They say they expect the market to stabilize once they develop a firmer sense of the kind of people buying insurance and the policies they prefer. In the meantime, if premiums keep rising, consumers will probably keep switching, seeking out lower prices from whatever insurers provide them.
Note: Imagine what would happen under the GOP's free market version of health care; will insurers be happy when Americans buying only their cheapest plans. That's what Republicans say will happen, "buying what you can afford." Insurers will quickly game the system and raise premiums on junk policies that will cover very little, jacking up co-pays and deductibles to unaffordable levels. They're already finding loopholes in the exchanges.

My conservative friend in Milwaukee called me about the movie The Big Short, and ironically told me about how the Wall Street banks gamed the system, never thinking the same could said about health insurers, big oil etc.. I'll bet he still thinks getting government regulation out of the way is the solution.

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