CNN Money Touts Obamacare's Success
CNN Money published a piece Monday titled "3 measures of Obamacare's success." Not surprisingly the author overlooks a lot of contradictory information in order to praise the law.
The first piece of good news, according to CNN Money, is that insurers are happy with how things look. The story quotes Ken Goulet of Wellpoint telling investors "I'm very optimistic as to where we are." Wellpoint is a big insurer so there's no doubt Goulet's opinion matters. But CNN Money is leaving out some important information.
Goulet may be optimistic but all that means is that his company, and many others, will be able to adjust to the new system and still make a profit. How will they adjust? Two weeks ago WellPoint's Ken Goulet told investors "Looking at the rate increases on a year-over-year basis on
our exchanges, and it will vary by carrier, but all of them will
probably be in double digit plus." That's apparently despite the risk corridor and reinsurance programs which are designed to keep rate increases to a minimum in the first three years.
A couple days earlier an unnamed insurance executive told The Hill that executives were shocked when HHS Secretary Sebelius predicted modest rate increases next year during testimony before Congress. The executive said the consensus inside the industry is that rates are going up sharply. He expected his company to triple rates before the market re-opens in November.
Which brings us to CNN Money's next measure of success: consumers. Not surprisingly, CNN received letters from a lot of people who were happy they were no longer penalized for having a pre-existing condition. For some of them, their rates dropped significantly thanks to subsidies. On the other hand, CNN also heard from a significant number of people who are not happy with their new plans:
A North Carolina resident said the deductibles are so high that his family won't be able to use the policy. "We are no better off than before," this person said. "We couldn't afford doctor visits then and we still can't."
In New York City, a woman who is nearly halfway through her pregnancy has yet to find an ob-gyn doctor who will accept her insurance plan. After calling numerous providers, she said she'd be better off had she and her husband put their $1,241 monthly premium in the bank since she's had to pay for care at an out-of-network provider.
And a resident of Bakersfield, Calif., writes that he's now paying $300 more a month for coverage, in part to pay for pediatric dental coverage, though his children are in their 30s, and for maternity benefits that his wife will never use.
It's doubtful any of these people are going to like the plans more once the double-digit rate increases kick in next year (though people getting subsidies might be insulated from this).
The final measure of success CNN Money considers is social, i.e. how many more people have health insurance now than before. A Gallup measure of the percentage of unemployed Americans has dropped this year to a level not seen since 2008.
On the other hand, a McKinsey and Co. survey found that only 27 percent of those who signed up for Obamacare were previously uninsured. Insurance industry expert Bob Laszewski says the number might be closer to 50 percent. In either case, a lot of the people the administration is touting were already insured. As Laszewski points out, it would be relatively easy for HHS to gather this information from insurers. The fact that they have not (or won't say so) suggests the numbers aren't as good as the spin they have been offering.
So to begin with, CNN Money ignores the fact that Americans were lied to about keeping their plans, keeping their doctors and seeing their premiums drop $2,500. These things didn't just happen, they were part of an intentional scheme of deception by the White House. But even putting all that aside, the fact that insurers see double-digit (or even triple-digit) rate increases on the horizon and that only a fraction of those signing up were previously uninsured means this is a very heavily qualified success.