Wednesday, April 03, 2013

Obamacare Dumb - UPDATED

Ezra Klein is one of our favorite punching bags, and with good reason. More often than not he whiffs it when it comes to blogging about health insurance, and in particular, +Obamacare.

Here is his latest fuzzy-brain post.
On Monday, we got a first look at insurance premiums under Obamacare when Vermont’s insurers became the first in the nation to set their bids. The answer? Insurance premiums in Vermont will be pretty much the same after Obamacare as they were before Obamacare.
Washington Post

Close, but no cigar.

Vermont is home to Ben and Jerry's as well as guaranteed issue health insurance, but there is more to the rate making process than just guaranteed issue.

Obamacare imposes strict plan design requirements, dictates age compression on individual plans not to exceed 3:1 and allows for a tobacco surcharge of up to 50%.

Currently Vermont carriers do not rate for tobacco and we see no evidence of a compressed rate guide.
One man’s “relatively costly” insurance is, of course, another man’s “thank God, my insurance covers that” insurance. And it works the other way, too. One man’s relatively cheap insurance is another man’s endless fight with the insurance company because his plan, confusingly, didn’t cover his illness. 
It would appear that EK prefers "relatively costly" insurance over affordable insurance . . . which no one will have come 2014 when rates double for most individuals.

The implication is, if you pay more for your plan you won't have any hassles getting your claims paid.

Where is the empirical evidence to support this allegation?

Apparently EK hasn't followed all the discussion about HIX plans and completely missed the narrowly defined networks and limited drug formularies.
Vermont’s insurers didn’t have to change their products because their products were already very good. In other states, some of the insurance products will have to be upgraded, as they’re stingier. But Obamacare will help people pay for the better insurance. 
Define better.

Actually, Obamacare doesn't help people pay for "better" insurance, but middle and upper income folks will be obliged to pay more taxes in an income redistribution scheme so the poor can have free or almost free health insurance.

Unless the 2.3% medical device tax is repealed anyone (including the poor and uninsured) who purchases or uses durable medical equipment will pay more for those devices.
The intent of Obamacare is to ensure that almost all Americans are covered by high-quality insurance that they can afford. To say that the law will move many Americans onto more costly insurance products is simply to restate part of that premise more negatively, and to leave out the effect of the subsidies, or the change in the underlying insurance product, is to mislead.
The intent of Obamacare was a political ploy based on lies and deceit. 

To imply that we will get more because we are paying a higher premium is just foolish. For years I have told clients "When you pay more you don't get more, you simply paid too much".

When it comes to Obamacare, this is definitely true.

Maybe Ezra can use his new, more costly insurance, to get a brain transplant. He can certainly use it.

UPDATE: Contra-Klein [HGS]: Ezzie's not the only Klein in the media, though, who has an opinion vis ObamaCare. Time's Joe Klein has choice words for the train-wreck:

"The key incentive for small businesses to support Obamacare was that they would be able to shop for the best deals in health care super-stores—called exchanges. The Administration has had 3 years to set up these exchanges. It has failed to do so." [Emphasis in original]

Now, we touched on that this morning, but Joe K goes a bit deeper:

"This is a really bad sign ... Where was the contingency planning? ... small business owners will be skeptical of the Obama Administration’s belief in the efficacy of the market system to produce lower prices through competition. That was supposed to be the point of this plan."


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