Yesterday, fans of Obamacare were cheering. A front-page story in the New York Times announced that individuals shopping for health insurance in New York would see their premiums halved, based on figures released by the Cuomo administration. It was an “extraordinary decline” that “demonstrates the profound promise” of Obamacare, said one supporter of the law. But the cheerleaders are wrong. New York’s premiums will remain among the costliest in the nation, after Obamacare becomes fully operational. And the unique history of how the Empire State destroyed its individual health-insurance market—using policies quite similar to Obamacare’s—will translate, at best, to only a handful of other states.
And Roy knows this how? Through the power of lies, damn lies, and Avik Roy Obamacare statistics.
In the vast majority of states, Obamacare has the net effect of raising premiums by a lot, which has given rise to the term “rate shock.” In California, for example, a healthy 40-year-old today can pay $94 per month in the individual market; that rises to $234 a month under Obamacare: an increase of 149 percent.
Obamacare even drives up costs in heavily regulated states. In 1993, Washington instituted progressive reforms similar to those of New York, though Washington’s were somewhat less punitive. This led me to expect that Washington, along with New York and a handful of other states, could see individual-market rate decreases under Obamacare. Much to my surprise, it turns out that even in Washington state, Obamacare will drive premiums upward by 34 to 80 percent. The average of the five lowest premiums for a 40-year-old in Washington today is $162; Obamacare will drive that up to $243.
How many times do we have to go through this? Roy is comparing cheap catastrophic coverage that has a super-high deductible and doesn't meet minimum coverage standards with Obamacare bronze plans, which are completely different in what they offer, AND on top of that there are subsidies for people in order to help them pay for it. It's like comparing the car payment on a cardboard box with wheels to an actual car. He admits he's doing it:
To conduct the above analysis, I and my Manhattan Institute colleagues, Yevgeniy Feyman and Paul Chung, compiled data from the five least-expensive plans on the traditional individual insurance market in the most populous ZIP code of each New York county, via healthcare.gov, the federal government’s health insurance web site. By taking the average of those five plans, while adjusting for the impact of the individual-market component of the Healthy New York exchange, we established a “current rate” baseline for each New York county. We then compared those rates to the average rate of the five least-costly Bronze plans in each ACA rating region. No adjustment was needed for denials, surcharges, or age, because New York prohibits charging different rates based on health status, gender, and age.
Congrats Avik, you're comparing plastic apples to orchards laden with fruit and complaining that the apples aren't as cheap and as tasty as the plastic stuff.