WASHINGTON – When Ohio Lt. Gov. Mary Taylor told Congress recently that Obamacare has pushed up the cost of individual health policies by a whopping 91 percent, critics of the government-mandated health insurance program declared outrage.
It was one more reason, Republicans said, that the Affordable Care Act of 2010 -- generally labeled Obamacare -- must be repealed and replaced.
But other figures released last week by health policy analysts help form a different conclusion: Obamacare rates are not nearly as bad as suggested by Taylor, who freely acknowledges her opposition to the federal health law.
In one study Obamacare premiums were cheaper than premiums charged in the much broader marketplace of employer-provided healthcare, even when accounting for differences in the two programs' coverage and features.
How can that be? And who's right?
What Taylor said:
Taylor wears two hats in Ohio government. She's the lieutenant governor – and might run for governor in 2018 – and she runs the Ohio Department of Insurance The department reviews and approves rates for insurers operating in the state.
Taylor based her 91 percent figure on the difference between average premiums in the individual market in two years: 2013, the year before Obamacare mandated nearly everyone have insurance or pay a fine, and 2017. The 2017 rates are for policies that will go on sale later this year for coverage starting in January.
The key numbers:
The change between the figure for 2013 and 2017 is 91 percent.
Obamacare under fire
"A near doubling of the premium will undoubtedly harm some Ohio consumers as open enrollment gets underway later this fall," Taylor said in testimony to the Senate Permanent Subcommittee on Investigations, chaired by U.S. Sen. Rob Portman, an Ohioan running for reelection who also opposes Obamacare.
Where Taylor's numbers came from:
Taylor's office said her 2013 numbers came from annual premium data for Ohio from the National Association of Insurance Commissioners.
The 2017 numbers came from monthly rate requests filed by Ohio insurers for 2017.
Both of these were straight averages, though adjusted for an annual comparison, for a range of policies that Ohioans bought or are expected to buy – a few Maseratis at the high end, if you will, a lot of Chevys and Fords in the middle, and a bunch of cheaper Kias at the bottom.
The strength and weakness of Taylor's numbers:
Taylor was criticized for making the same kind of comparison in advance of 2014, the first year of mandatory coverage, because the 2013 market was so vastly different.
Insurance coverage wasn't required by law in 2013. A number of people simply skipped coverage or bought high-deductible policies and played roulette with their health and bank accounts. Those who truly needed insurance because of poor health or preexisting conditions often were turned down or, if accepted for coverage, found it unaffordable. That was one of the prime motivators for passage of the Affordable Care Act, which outlawed price differentials for health status and guaranteed no one could be denied coverage.
Taylor's number for 2013 struck Gary Claxton, vice president of the Kaiser Family Foundation, as rather low. It suggested either of two things, he said in a phone interview:
This not to say Taylor's underlying figures were wrong. But by using 2013 as the baseline, Taylor was comparing a very different insurance product and market.
A different look at premiums:
Mathematical averages give you a general sense of price. They do not tell you about policy features, out-of-pocket costs and narrow or broad networks of doctors and hospitals. An industry trend has been for insurers to offer fewer provider choices in exchange for more modest premium hikes.
These are among the reasons why a rate request by, for example, Anthem Blue Cross Blue Shield states extremes as well as averages. The company expects a 15.9 percent premium hike on average for 2017, a filing shows. But some policies could go up by as much as 27 percent, or as relatively little as 9.1 percent.
You want averages? Here's one: The average Medical Mutual of Ohio premium per client, or "member, " in the individual market was $203.17 in 2013, the year before Obamacare policies went on the market, the insurer said.
In 2016, the average Medical Mutual premium for an Obamacare individual policy was $416.74.
That's a 105 percent change.
So again, was Taylor right?
Thx to @MaryTaylorOH for joining me in the Senate today to talk about the consequences of #Obamacare cost increases: pic.twitter.com/9pU61s9XfQ— Rob Portman (@senrobportman) September 15, 2016
Mathematically, it appears so. Qualitatively? That's a different matter, as insurers acknowledge.
A fresh analysis:
The Urban Institute's Health Policy Center last week released a study with a different perspective. It found that yes, Obamacare premiums are rising – but in most states including Ohio, they're not as expensive as premiums in the broad employer-provided insurance market.
And most Americans get coverage from an employer, not from Obamacare, although the law's requirements have affected the employer market, too.
For example, the study found that in Ohio, the average monthly cost for insurance for an individual, counting all sources of payment, was $514 a month in 2016 in the employer market.
The cost for an Obamacare policy – specifically, the second-lowest-price policy for a 40-year-old in the silver tier, believed by analysts to represent a typical purchase because of its cost-sharing benefits for the buyer – was $258. Notice how much lower that is than the $514 employer-sponsored plan -- and how it differs from the $422.10 a month average in Taylor's 2017 example (divide her $5,065.30 annual premium by 12 months)?
But wait: Isn't this comparing apples with oranges? The coverage is different. The ages of the people covered might be different, affecting the cost. The benefits provided, the out-of-pocket costs, the payments for care – the actuarial values of each policy -- are different.
So the Urban Institute used actuarial formulas to factor how these differences affected price. It added those differences into the calculation. This pushed the true value of that Ohio Obamacare policy up a lot higher, to $407 a month before subsidies for the buyer in 2016.
Yet that $407 was still 21 percent less than the price of an employer-sponsored policy. The difference came to 22 percent – that is, the Obamacare policy was 22 percent less – in the Cleveland market, and 32 percent less in the Cincinnati market.
Are nongroup Marketplace premiums really high? Not compared with employer insurance, new report finds https://t.co/w4MHWmy1Vj #ACA— Urban Institute (@urbaninstitute) September 19, 2016
What to make of this?
We'll cite the study's headline:
"Are nongroup marketplace premiums really high? Not in comparison with employer insurance."
Your own circumstances may vary. The study, after all, was based on averages.
Our editors found this article on this site using Google and regenerated it for our readers.
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