Obamacare to Raise Californians' Individual Premiums 64% to 146%
Triumphalist progressive claims that early California figures prove Obamacare will reduce health insurance costs are coming to a screeching halt as closer analyses reveal Californians will actually experience a staggering 64% to 146% increase in individual health insurance premiums come January 2014.
Recently, progressives like Washington Post columnist Ezra Klein and New York Times columnist Paul Krugman have been touting news out of California’s Obamacare—called Covered California—that early numbers were looking good. “It looks as if Obamacare’s first year in California is going to be an overwhelmingly positive experience,” cheered Krugman giddily. “The real Obamacare shock will be one of unexpected success” wherein “millions of Americans will suddenly gain health coverage” and “only a relative handful of people will be hurt at all,” wrote Krugman.
But as Forbes writer Avik Roy explains, progressives’ premature exuberance appears to have been based on a misleading press release from Covered California’s executive director Peter Lee.
Here’s what happened. Last week, Covered California—the name for the state’s Obamacare-compatible insurance exchange—released the rates that Californians will have to pay to enroll in the exchange.
“The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”
That’s the sentence that led to all of the triumphant commentary from the left. “This is a home run for consumers in every region of California,” exulted Peter Lee.
Except that Lee was making a misleading comparison. He was comparing apples—the plans that Californians buy today for themselves in a robust individual market—and oranges—the highly regulated plans that small employers purchase for their workers as a group.
Lanhee Chen, a fellow at the Hoover Institution at Stanford University, summed it up nicely: “To put it simply: Covered California is trying to make consumers think they’re getting more for less when, in fact, they’re just getting the same while paying more.”
Roy ran cost comparisons using California’s own data. A 25-year-old non-smoker Californian male will pay between 100% and 123% more for health coverage. For those over the age of 40, Obamacare does not allow you to purchase the lower-cost catastrophic plan. That means a 40-year-old nonsmoker Californian male will pay premiums under Obamacare that are on average 116% higher.
“The media are really dropping the ball here by citing California Covered’s press release uncritically,” concluded Conservative Intelligence Breifing editor David Freddoso.