Obamacare won’t screw you, but red-state sabotage probably will

Forget about Washington Theater staring Ted Cruz and the clown car, the Affordable Care Act won’t be defunded this week or anytime in the near future. It won’t get repealed, either.

Trust me, I’ve run the numbers. Republicans can’t win enough seats in 2014 to beat a veto even if they run the board, and that’ll be the last election for a few cycles where there are more Democrats up for reelection than Republicans. If Hillary Clinton wins in 2016, that may put repeal out of reach until 2021 or 2025.

What people need to pay attention to is a new report from Health and Human Services on what to expect from the new insurance exchanges that open next week. Here’s what you need to know to cut through the spin.

First, claims that “despite what they say, costs are going up” are misleading. We’ve known since the Republican Party came up with the idea for an individual mandate in the 1990s that premiums for some people would have to rise, particularly young adults. You can’t ban insurance companies from discriminating against sick people and people with a family history of poor health, which greatly increases risk and cost, and not flood the pool with new healthy people (the mandate) that subsidize the young, elderly, and chronically ill.

It’s why you really had to laugh at members of Congress, all on the political right, when they advocated for years to repeal the mandate but leave everything else. It would have driven insurance companies into bankruptcy. You either have the pre-existing condition ban and national mandate, or neither.

Young healthy adults that before now could opt not to have insurance at all would have to buy it. That’s a cost increase that wasn’t just expected, it’s necessary for the entire system to function. Some adults, particularly wealthy individuals and families who already have expensive insurance would have to pay more. That had to happen, too. The benefits of doing that are that premiums for the elderly would drop through regulation and caps on insurance payouts would be banned.

It doesn’t matter how sick you are or for how long, under Obamacare the insurance company can’t cut you off so long as you keep paying your premiums.

Premiums will rise for some people. It’s an unavoidable price for universal insurance coverage and we’ve known that, again, since the GOP invented this system more than a decade ago.

The question was always going to be how much would premiums increase for some people, how much would they decrease for others, and would the subsidies and mandate make it all work.

The answer from HHS a week before the insurance exchanges open is that the average premium for an individual will be about $328 per month, 16% lower than the CBO projected. The report is good news, but it’s also of limited value. There should be cheaper plans than $328 with less coverage for you to choose from. Some states with more competition will see lower premiums, others with less competition or no competition will see higher rates.

The cheapest plan on the cheapest exchange — in Tennessee — is $119 per month without federal subsidies. The cheapest plan on the most expensive exchange — in Wyoming — will be $286 per month, also without subsidies. With subsidies, these figures could drop as low as $48 per month in Arkansas and $120 in Arizona, if you make less than $25,000 per year. According to Politico, “[A] working family of four with a household income of $50,000 … would pay no premiums at all for a bronze plan in Arkansas”, after subsidies.

All of this depends on how old you are, how many people you’re covering, the amount of coverage you want, how much money you make, and where you live. HHS can’t possibly guess what you might have to pay without knowing all of that so you to find out, you’ll just have to look on your state’s exchange next week.

People can hate having to buy something they don’t want, it’s a free country. But this law is going to improve the health care situation in the United States significantly. There’s almost no chance that it won’t now.

That said, things could still get screwed up and unperform or even be sabotaged. Many red states, if not most, are working hard to undermine the law and force it to fail now that we know it’s going to succeed if we leave it alone. Florida’s government hasn’t reached the level of treason, but it’s marching that way at full speed, banning federal “navigators” from state property. These navigators exist for only one purpose: to help people understand their obligations and options under Obamacare so that they can get the most out of it. Banning navigators from state property is childish and entirely punitive, and it’s not Obamacare or the federal government that’s being punished — it’s uninsured Americans living in Florida that will suffer.

People that don’t know the deadline for holding insurance is January 1st, 2014, could end up getting an unexpected bill from the IRS next year, just because Florida Republicans threw a temper tantrum. People that don’t have computers at home, which is still a lot, or people that aren’t tech savvy could have a really hard time getting on their exchange to buy insurance or may not even know these things exist. They could end up believing the mandate requires them to buy private insurance, which isn’t eligible for subsidies, costing them a great deal of money — again, because Florida Republicans are throwing a temper tantrum.

That’s one example in one state. This kind of obstruction that won’t stop Obamacare but will hurt uninsured Americans could come in a dozen different ways in as many as 30 or 40 states.

In the end, the greatest harm and chaos that could result from Obamacare is the chaos intentionally created by its most strident opponents that have set themselves against it as if it were Sharia law.

I don’t know about you, but I find that behavior to be irresponsible and insane.

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If you don’t want to take my word for it, here’s a cross-section of response to the HHS report in no particular order or balance:

Double Down: Obamacare Will Increase Avg. Individual-Market Insurance Premiums By 99% For Men, 62% For Women – For months now, we’ve been waiting to hear how much Obamacare will drive up the cost of health insurance for people who purchase coverage on their own. Last night, the U.S. Department of Health and Human Services finally began to provide some data on how Americans will fare on Obamacare’s federally-sponsored insurance exchanges. HHS’ press release is full of happy talk about how premiums will be “lower than originally expected.” But the reality is starkly different.

What Obamacare Will Cost You: Now We Know – Several states had already released their data. With this report, HHS provided premium information for most of the rest. Overall, the numbers are pretty consistent with previous reports, albeit with some new and interesting wrinkles. It seems like mostly good news, though the law’s critics would argue it vindicates some of their arguments, as well.

New Report: For 95% Of Americans, Obamacare Will Cost Much Less Than Expected – Ninety-five percent of the eligible uninsured will have the choice of at least two insurers carriers, which will offer health care plans at various levels of coverage: bronze, silver, gold or platinum. In the 36 states surveyed by the report, the uninsured will have a choice of 53 different plans, on average, and 1 in 4 insurance companies offering insurance will be doing so for the very first time in 2014.

Final Word On Obamacare Coverage: Cheaper Than Expected – Some might still find it preferable to pay the individual mandate penalty ($95 for the year or 1 percent of their income, whichever is greater), as Kaiser Health News reported Tuesday.

HHS’s Rates Are Out — Despite What They Say, Costs Are Going Up – The segment seems to be based mostly on a cheerful press release and report from HHS claiming premiums are “lower than originally expected.” The report is very light on details — lower premiums than who expected? Not the Obama administration, since it expected that premiums would be lower for everyone as Manhattan Institute’s Avik Roy pointed out yesterday. If the premiums are lower than people who predicted a rate shock, that’s hardly an accomplishement.

How much will Obamacare premiums cost? Depends on where you live. – The report, released Wednesday by the Department of Health and Human Services, showed significant variation in the insurance premiums that Americans shopping on the individual market could pay under the president’s health-care overhaul. Across the 48 states for which data were available, the unsubsidized monthly premiums could be as low as $70 for an individual and as high as $1,200 for a moderate plan for a family of four.

Lamar Alexander: Obamacare will increase some Tennessee premiums 190 percent – Tennessee Republican Rep. Lamar Alexander slammed a health-care report issued by the Obama administration on Wednesday, noting that health insurance policy prices will actually increase for some Tennesseans entering the exchanges.

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I’d love to have presented this wide range of opinion without commentary so that you can judge for yourself what to believe, but some of the things claimed in the right-leaning stories are so far fetched or misleading that I can’t publish them here without disclaimers of some sort. It would be irresponsible to do so.

Avik Roy, the regular contributor to Forbes on health care, has been caught in the past making rookie mistakes when writing always negative stories about the Affordable Care Act. He opposed it when it was written, opposed it when it was passed, and still opposes it now. He’s written books advocating purely free market health care and has a financial interest in seeing Obamacare go away. None of that makes him wrong, but it’s important to know, regardless. He’s not an analyst in the health care wars, he’s a combatant.

The this bit from Hot Air can’t go unaddressed:

While the Obama administration has been touting the oh-so-excellent numbers from blue states enthusiastically implementing ObamaCare of their own volition – including those whose health care costs are already among the costliest in the nation – we’ve been waiting to hear more comprehensive information about the 36 states in which the administration is fully or partially coordinating the ACA’s implementation.

Some blue states with very high insurance premiums stood out when they implemented the ACA, and for good reason. They had unusually high costs and so ACA exchanges created unusually big drops in premiums. What Hot Air won’t tell you, because this is inconvenient information that harms the conservative agenda, is the reasons why those states have high costs to begin with.

New York, if my memory serves me, had some of the highest premiums in the nation because premiums and health insurance were largely unregulated there. New York represents what Republicans would do to health care all over America if they could get everything they wanted: unregulated health care. Obamacare regulations did exactly what they were designed to, they forced insurance providers to compete against each other on price and regulated spending, and it brought rates down dramatically. New York is one of the states where I think premiums have literally dropped — not a state where increases are lower than expected.

Washington state I believe is the other outlier, a particularly interesting one. Washington bans insurance companies from discriminating based on pre-existing conditions, but doesn’t require everyone to have insurance to balance greater risk and higher costs. Washington before Obamacare is what the entire country would have if Republicans had succeeded in repealing the individual mandate while leaving the rest of Obamacare alone, something that polls show would be extremely popular. As a consequence, Washington also has some of the highest premiums in America.

Those two blue states show you what health insurance would look like if the two biggest modern GOP ideas for “reform” actually happened, and the results have been catastrophically high insurance premiums that dwarf the rest of the country.

If you take all the most popular provisions of Obamacare, sans the mandate, you’ve got Washington’s extremely high premiums. If you throw in the dreaded mandate, premiums come way down. That’s what it does, that’s why it exists. It forces healthy people without insurance to pay into the pool to cover all the sick people that insurance companies were refusing to serve. That some states aren’t seeing big drops like New York and Washington show that regulation in those states is already working pretty well, but that’s all it does. It says nothing about the more comprehensive coverage you’ll get from the exchanges which is at least as important as costs, and in fact has a lot to do with costs.

One of the reasons the plans on the exchanges cost more in some cases than private insurance in places like Lamar Alexander’s Tennessee is because those plans fucking suck. There’s no other way to put it. They can only be gotten by young adults who don’t really need health care, and their plans barely cover anything. If you suddenly need an expensive medication for your heart, you’re going to be paying a lot less on the exchange than you would without it.

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