What does California show?

A number of you have written me in the last few minutes to shout that everyone is wrong about California. Some of you are charging that a healthy 25 year old, rates have gone up more than 100%. I have a number of comments:

  1. A healthy 25 year old could have the option of remaining on their parents’ family plan. Sure, that’s not for everyone, but if you’re a low income young adult, it’s totally a viable option for many. So it’s an odd example.
  2. It’s possible that a completely healthy person out there can find a plan for cheaper than the exchanges, but I’m doubtful it’s as comprehensive. One of the things the ACA does is mandate minimum benefits, do away with annual and lifetime limits, etc. Deal with it. Attack that if you like. But don’t pretend that it’s a “RATE INCREASE!” comparing apples to apples. Crappy insurance is cheap. Good insurance is not.
  3. These arguments always ignore the subsidies. Many, many people won’t pay the full sticker price of the premium. So even if the premium goes up, the actual cost to the individual may not.
  4. I even give that it’s likely that rates will increase for some segment of the population. We’re going from an individual rating system which was awesome for young, healthy people but terrible for everyone else, to a community rating system. The young, healthy people are the ones who will get the short end of the stick. But many can go on family plans or still get subsidies. And, in return, they get the guarantee of more affordable insurance in the future as they age. That’s the tradeoff.
  5. Why are people always using the straw man of the healthy 25 year old male? Or even the nearly-apocraphyl perfectly healthy 45 year old male, who has nothing wrong with him at all?  Is that really who the system is for?

Bottom line is that this is a huge endeavor that affects tens of millions of people. No one should be under the illusion that all of them will see awesomeness tomorrow. Community ratings and a mandate mean that some people – especially the young and perfectly healthy with no family history of illness – will see an increase in their premiums over what they paid before. But the number of people who will actually pay more out of pocket for the same insurance as before is quite small. Trying to find them, and using them as the repeated anecdote to attack the overall policy may score political points, but isn’t necessarily representative of the entire scope of the ACA.


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