I have resisted, for the most part, the urge to write about health policy much here on the blog the past few months. That’s because, for the most part, it feels like people only care about health policy in terms of how it might affect the horse race of this election. The news doesn’t appear interested in discussing any nuance. Congress certainly doesn’t appear to be interested in trying to fix anything at all.
But enough of you have emailed me about the latest news – that of the “25% increase in Obamacare premiums” – that I’ll wade in this time. But only to make some brief points.
- Yes, that number is accurate. But it is, to some extent, a course correction. As Sarah Kliff pointed out on Twitter, the CBO’s projection in 2009 of where they thought premiums would be in 2017 was $5,538. They’re projected now to be $5,586. The problem is that insurance companies came in too low initially. I don’t deny that many viewed this with glee when the numbers were below projections years ago, but those low numbers were a mistake. They were also made by private insurance companies, not the government. So, this isn’t clearly some “problem with the law”. It could just as easily be “insurance companies underestimated costs initially, and now they’re back in line with original projections”. Your interpretation will vary.
- Many believe that those buying insurance on the exchanges are sicker than predicted. Some of that is because there was likely pent-up demand for care. That’s been shown in other instances of newly insured people before. It’s also partially due to the fact that the mandate is weak. Healthy people are still opting not to buy insurance. We could fix that if Congress was interested. I won’t hold my breath.
- It goes without saying that these premium increases only affect those on the exchanges. It goes without saying that most people, who get subsidies, will be shielded from those increases. That doesn’t mean that the 17% of the 9.1 million people who get exchange plans but don’t get subsidies aren’t important or worthy of concern, but our outrage should be tempered by the actual numbers of people affected.
- Many people could avoid these rate hikes if they shop around during open enrollment and change plans. I’m sympathetic to the argument that people don’t want to have to change plans or doctors to save money. I’m not as sympathetic when those arguments are coming from people who favor a “free market” in health care. See, competition, and flocking from higher to lower price plans is one of the ways in which the free market drives down spending. If people are unwilling to move and just demand lower costs for what they want, then insurance companies have no incentive not to raise rates higher and higher.
- Some people don’t have the chance to shop around, though, because there aren’t many plans offered in some areas. I’m very sympathetic to those arguments. That’s a real issue, and we need to fix it.
- This is, as always, about tradeoffs. Negative things should be discussed alongside positive ones. The opposite holds true, as well. I don’t go around touting nice statistics about the ACA while ignoring its issues. I don’t do the opposite either.
You’ll notice that “fixing it” is a common refrain. There are issues, as there are with almost all policies in the US. If your goal is to go back to the status quo ante, you have no desire to fix it. You just want it to get worse and worse. That serves the political games of others.
But I hope you’ll note that I’m not saying that issues don’t exist. They do. We need to take action to make those issues better.
If you’d like to talk about that, especially two weeks from now, I’ll look forward to having that discussion here at TIE, at The Upshot, on Twitter, and anywhere else I write. For now, though, I’ll assume that this will just degenerate into an election-horse-race-talking point until November 8 passes.*
*Prove me wrong, media. I’d love that.