• JAMA Forum: Will the Cost of Health Insurance Under the ACA Be Lower Than Expected?

    I expand on my previous posts and thoughts (and include some new evidence) in my latest post over at the JAMA Forum. Go read!

    @aaronecarroll

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    • from your jama forum post:

      “Out-of-pocket spending may be lower than thought”

      how do you figure that? the kff report only mentions (as far as I can tell) that some people will “be eligible for” subsidies to help with their out-of-pocket costs.

      so how DO you figure that? like this….

      I don’t know if you ever checked out the kff calculator, but I have done so a few times. when it first came out, maximum out-of-pocket spending for my income, for a single person, for a silver plan, was approx. $3100. now the maximum out-of-pocket for my income is $5200. I’ve seen exactly ONE blog post (or maybe it was an article) on the internet that mentioned, and that only as an aside, that the max oop had been quietly (and massively) raised.

      from the cbo report you linked:

      “Plans could achieve lower premiums through some combination of greater cost sharing (which would lower premiums directly and also lower them indirectly by leading to less use of medical services), …”

      so the cost of premiums went down because the cost of getting actual care went up. good news for healthy people, bad news for sick people.

      added bonus: lower utilization! who needs death panels when you can get sick people to just self-ration instead?

    • Where to begin?

      For starters, there are two relevant measurements (as I see it) for whether Obamacare will cost less that predicted. The first is for individuals/families buying insurance, either through exchanges or getting it from their employer. And there it depends on whose prediction you looking at. President Obama’s? Well, I don’t think we’re going to see that $2,500 annual per person (or was it per family) reduction in heath costs/premiums. But premiums will apparently be lower than what CBO projected, so there’s that.

      Second is cost to the taxpayer, and the jury is still way out on that. Remember, the premiums from the CLASS program aren’t part of the revenue any more, so already the program is costing more than expected (I’m using the bizarro-world DC budget math here, feel free to fire away at that. And if the risk pool isn’t what is hoped for, then the subsidies paid for exchange-based policies are likely to rise over time as the ‘death spiral’ effect sets in.

      As for this: …”More than 90% of [the young] will receive subsidies from the federal government to help them pay for this insurance…” it’s just flat out wrong. The Urban Institute paper assumed that all under-400% of poverty level individuals will receive subsidies. In fact, in most states subsidies aren’t available for the young (let’s call them <30 or so) once their income hits between 250 – 300%, meaning the subsidies are going to be pretty paltry from about 200% – 300% depending on state.

      Needless to say, if subsidies for many of the young are meager or non-existent, that should change the calculations people are making about what the risk pool will look like. And if it's sicker and older than projected – well, I think everyone on all sides understands what the likely result of that will be.

    • There is a chance that some people will be eligible for no premium plans inside the exchange. If your subsidy is more than the premium you have no monthly cost. If household income is under 200% FPL there is real chance you could end up with a no cost plan. Then when we add in the cost sharing reductions, policy holders may have very little out of pocket expense. Many people will get access to health insurance because of this and then gain access to health care.

      • True enough. Broadly speaking, under 200% of federal poverty is the ‘sweet spot’ for the Obamacare subsidies (well, and above 100-138% depending on the state). Recognizing that there are real benefits to some people doesn’t conflict at all with a general opinion that the overall law is terrible, and vice versa.