• A tale of two charts on exchange premiums

    The NYT and WSJ both feature charts today on state-by-state comparisons of premiums for health insurance policies in the exchanges. The WSJ chart is a health policy fail because it compares apples to zombies (bronze exchange policies with today’s cheapest available bare-bones coverage) and fails to include the tax subsidies. Both deficiencies are noted, but that just means they knew the chart was misleading:

    WSJ

    The NYT chart shows the premiums (with and without subsidies) for a family of four and a 27 year old, using the second-cheapest Silver plan. Much better, but it would still be interesting to also see the current cost of an actuarially-equivalent plan. An excerpt:

    NYT

    @koutterson

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    • From David Ramsey on Twitter: @ArkDavey

      @onceuponA @koutterson Ha. Just found the plan they used for Arkansas. $25,000 deductible!

    • Thanks Kevin.

      The family premiums in the NYT tables are puzzling to me.

      Throughout corporate America, family health insurance premiums are very often in the range of $1200-$1500 per month……and that is not for Cadillac coverage either.

      Now come the Exchanges. The early offers from insurers who face guaranteed issue and full maternity coverage (among other mandates)
      are for $700 a month or less.

      What am I missing? Could it be that the $700 a month is for a very very young family, whereas current group insurance premiums in a large corp often have to adjust for older and sicker employees?

      I welcome the answer from anyone.

    • The WSJ analysis fails to mention how many people have the “lowest cost option” insurance, and what that covers.

      Avik Roy at Forbes and the Manhattan Institute has been making similar comparisons between “bronze” and “cheapest” plans. http://www.manhattan-institute.org/html/miarticle.htm?id=9639
      http://www.forbes.com/sites/theapothecary/2013/09/04/interactive-map-in-13-states-plus-d-c-individual-health-premiums-will-increase-by-an-average-of-24/

      Roy replies to a comment criticizing this method: “The reason to look at the cheapest plans is because we are focused on people who currently finding insurance difficult to afford.”

      So there’s one rationalization of what seems to be a clear case of cherry picking.

    • I contest the notion that the WSJ table is misleading. It answers a certain question, “For people who will purchase the cheapest plan available, how much will Obamacare cost them (without subsidies)?” Just because it doesn’t answer the question you want it to answer, “Will an identical plan be more or less costly under Obamacare than it is today?” doesn’t mean it’s misleading.

      Both questions are important and valid.

    • Lost in this discussion is the fact that the exchange plans will have relatively high out of pocket costs – and these are not subject to the $6,350 limit next year…

      A large number of potential enrollees – sick with chronic conditions – will be surprised when they learn that they will be paying $300+ for insurance AND required to pay $500+ a month out of pocket.

      $800 a month is not going to be easy for many of these folks.

      As I have said before – locking in a high cost system without first dealing with the cost curve is a recipe for a train wreck.

      • If I understand you right, this is not correct. Virtually all health benefit plans in 2014 — whether available through exchanges, in the off-exchange individual market, the small group market or the large group market — will be generally subject to the $6,350 out-of-pocket ceiling.

        There are two noteworthy exceptions, neither of which will likely be very numerous:

        1. Grandfathered plans

        2. Some employers that have a primary medical plan but then outsource other benefits (typically pharmacy) to a “separate service provider” will not need to fully obey the out-of-pocket ceiling for one year until 2015

        • Upon further thought, I realized that neither of these exceptions will really apply to the individual exchanges. So all exchange plans in 2014 will need to adhere to the $6,350 out-of-pocket ceiling (or twice that level for non-single coverage)