4 ms·

> In my case, even the most expensive plan for our family in the State of Maine, where we live, is half the cost of what we are currently paying, exclusive of a

> In my case, even the most expensive plan for our family in the State of Maine, where we live, is half the cost of what we are currently paying, exclusive of any subsidies. The elephant in the room is that this is not the typical case - http://www.forbes.com/sites/theapothecary/2013/09/25/double-down-obamacare-will-increase-avg-individual-market-insurance-premiums-by-99-for-men-62-for-women/ http://www.forbes.com/sites/theapothecary/2013/09/25/double-...

chimeracoder 13y ago
> The elephant in the room is that this is not the typical case - http://www.forbes.com/sites/theapothecary/2013/09/25/double-.. http://www.forbes.com/sites/theapothecary/2013/09/25/double-.... It still boggles my mind that people are surprised by this. Mathematically, including people with pre-existing conditions will mean either that those people are required to pay for the (expected, not actual) costs of their own care, or that other people will be required to pay for those costs[0]. This effect is much larger than the effect of mandating insurance for younger, healthier people who otherwise elected out of getting insurance[1]. Note: this is not a normative statement about whether this is a "good" outcome. This is just a a mathematical observation about the way insurance works, from a mathematical and economic perspective. [0] Subsidies come from taxpayer money, so they have no net effect on this accounting - it changes how the money changes hands, but the money still has to come from somewhere. [1] I'm waving my hands around the math here, but if people are interested I can dig up the more detailed blog post draft that I did a while back explaining this in full detail.
- lukasb 13y ago
  The effect that you're ignoring is that insurance premiums have a hefty amount of margin built into them, and the ACA produces a collective bargaining effect that gives insurers an incentive to offer a competitive price on the exchange.
- powertower 13y ago
  > It still boggles my mind that people are surprised by this... I was surprised because I was told that this new coverage affordability came from getting insurance companies greed in check. I didn't know that insurance companies were actually lobying for Obamacare, not against it. http://www.policymic.com/articles/62541/here-s-the-proof-obamacare-is-for-the-insurance-companies-and-not-for-you http://www.policymic.com/articles/62541/here-s-the-proof-oba...
  - EpicEng 13y ago
    Of course they are; this bill feeds them a guaranteed customer base. This is the largest issue I have with ObamaCare. The sole job of an insurance company is to assess risk. With a government mandated customer base there is no longer any risk to asses. So... Why are the insurance companies involved at all? Why are they still in business? That's rhetorical, I know the answer, and I don't like it. We're all paying a middle man to do nothing for us.
    - r00fus 13y ago
      > Of course they are; this bill feeds them a guaranteed customer base. This is the largest issue I have with ObamaCare. The sole job of an insurance company is to assess risk. With a government mandated customer base there is no longer any risk to asses. I'm no fan of insurance companies, but this statement does not compute. Of course there's still risk involved - the risk that the patient's costs will exceed premiums. If you set the premium too high, the customer will flee to a competitor. You also can't raise your premiums too high, because you have the 80% medical loss ratio - you can no longer just eat the rest as profit [1]. Totally agree that government should be the single payer or even the sole provider of healthcare (though that model isn't as widely implemented (UK NHS, US Veterans Admin) and has it's challenges as well). [1] http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/2012-medical-loss-ratio-report.pdf http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-R...
    - lhc- 13y ago
      Because Obama was unable to garner enough support for Single Payer... at least, not yet. While the ACA is hardly a perfect law, its quite possible that the greatest thing it accomplishes is showing Americans how much worse our current system is than the Single Payer systems the rest of the 1st world employs. While the insurance companies were generally lobbying for the ACA (although there's definitely clauses they did not support), they are vehemently against Single Payer, since it puts them all out of business.
- joshuahedlund 13y ago
  > It still boggles my mind that people are surprised by this. I agree with your mathematical observation, but maybe part of the surprise that such math was often underplayed or outright ignored in the claims that premiums would be going down, ex. [0][1]) [0] http://www.washingtonpost.com/blogs/fact-checker/post/president-obamas-claim-that-insurance-premiums-will-go-down/2012/08/09/424048f2-e245-11e1-a25e-15067bb31849_blog.html http://www.washingtonpost.com/blogs/fact-checker/post/presid... [1] http://www.nytimes.com/2013/07/17/health/health-plan-cost-for-new-yorkers-set-to-fall-50.html?_r=0 http://www.nytimes.com/2013/07/17/health/health-plan-cost-fo...
- 001sky 13y ago
  It still boggles my mind that people are surprised by this. Mathematically, ... Its an interesting social phenomenon, that large-scale opaque repricing of a commodity is met with opportunistic ~scalping. This happened accross europe during the conversion to the Euro. US consumers are probably rightly suprised. Despite the expectations of economists that the euro change over would have no effect on prices, European consumers perceived the opposite. To shed some light on this puzzle, we develop a model of imperfect information in which cheaper goods experience higher price growth after the changeover. Retailers, aware of consumers’ difficulties in adopting the new currency, use currency changeovers to increase profits by in creasing prices. The lower the price transparency after the changeover, the higher the euro–related inflation. Using data on inflation (Eurostat) and price levels (Economist Intelligence Unit), we show that although the euro changeover did not significantly increase inflation, it nevertheless had distortionary effect on prices. {etc} http://www.kellogg.northwestern.edu/faculty/dziuda/personal/pdf/jcmb_veryfinalrevision2.pdf http://www.kellogg.northwestern.edu/faculty/dziuda/personal/...
jamroom 13y ago
Just want to add another data point, that here in Washington State, a comprehensive plan for my family is going to be around $600 less per month under Obamacare than what I can get right now. This is without any subsidies of any kind, so while I know it is just 1 extra data point, I consider myself a "typical case" (3 dependents, 1 pre-existing condition). I can say that the Manhattan institute's numbers (what the Forbes article is based on) for Washington appear to be incorrect (based on just my experience though), as they list a premium for a 40 year old man to be currently $181. I've been buying individual health care for myself and family for the last 8 years, and maybe back in 2006 it was about that price. A "comprehensive" plan in Washington would easily set me back ~$1300 per month for my family of 5 - under Obamacare the same (or even sightly better) plan would be around $750. I currently only carry a "catastrophic" coverage plan, and even with a $7500 deductible it's still $600 per month. So for me I'm looking forward to Obamacare.
- powertower 13y ago
  The problem here is that for some people's coverage to be lowered, impoverished people to be covered, and pre-existing conditions paid for, a bunch of young and healthy individuals (without families) are now required to sign up for insurance. And the cost of that insurance for those healthy individuals is now 2-4x more expensive than it would have been before Obamacare took place (obviously the money has to come from somewhere to balance it all out). *This is of course for the lower and mid level coverage plans, the higher end stuff reduces that margin between the pre and post levels - but not for everyone, and in some cases people are going to pay 15-20% of their TOTAL income for worse plans. And that's going to enrage those people.
  - jamroom 13y ago
    Of course - that's the whole reason for the mandate. Similar to social security, there needs to be a pool of people paying into the system that are not using it. I don't agree with you that the plans will be worse though - maybe in some states, but certainly not here in Washington.
    - 13y ago
SeanLuke 13y ago
Citing Avik Roy does not help your claim. See http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/01/the-shocking-truth-about-obamacares-rate-shock/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/01/t...

chimeracoder 13y ago

> The elephant in the room is that this is not the typical case - http://www.forbes.com/sites/theapothecary/2013/09/25/double-.. http://www.forbes.com/sites/theapothecary/2013/09/25/double-.... It still boggles my mind that people are surprised by this. Mathematically, including people with pre-existing conditions will mean either that those people are required to pay for the (expected, not actual) costs of their own care, or that other people will be required to pay for those costs[0]. This effect is much larger than the effect of mandating insurance for younger, healthier people who otherwise elected out of getting insurance[1]. Note: this is not a normative statement about whether this is a "good" outcome. This is just a a mathematical observation about the way insurance works, from a mathematical and economic perspective. [0] Subsidies come from taxpayer money, so they have no net effect on this accounting - it changes how the money changes hands, but the money still has to come from somewhere. [1] I'm waving my hands around the math here, but if people are interested I can dig up the more detailed blog post draft that I did a while back explaining this in full detail.

lukasb 13y ago
The effect that you're ignoring is that insurance premiums have a hefty amount of margin built into them, and the ACA produces a collective bargaining effect that gives insurers an incentive to offer a competitive price on the exchange.
powertower 13y ago
> It still boggles my mind that people are surprised by this... I was surprised because I was told that this new coverage affordability came from getting insurance companies greed in check. I didn't know that insurance companies were actually lobying for Obamacare, not against it. http://www.policymic.com/articles/62541/here-s-the-proof-obamacare-is-for-the-insurance-companies-and-not-for-you http://www.policymic.com/articles/62541/here-s-the-proof-oba...
- EpicEng 13y ago
  Of course they are; this bill feeds them a guaranteed customer base. This is the largest issue I have with ObamaCare. The sole job of an insurance company is to assess risk. With a government mandated customer base there is no longer any risk to asses. So... Why are the insurance companies involved at all? Why are they still in business? That's rhetorical, I know the answer, and I don't like it. We're all paying a middle man to do nothing for us.
  - r00fus 13y ago
    > Of course they are; this bill feeds them a guaranteed customer base. This is the largest issue I have with ObamaCare. The sole job of an insurance company is to assess risk. With a government mandated customer base there is no longer any risk to asses. I'm no fan of insurance companies, but this statement does not compute. Of course there's still risk involved - the risk that the patient's costs will exceed premiums. If you set the premium too high, the customer will flee to a competitor. You also can't raise your premiums too high, because you have the 80% medical loss ratio - you can no longer just eat the rest as profit [1]. Totally agree that government should be the single payer or even the sole provider of healthcare (though that model isn't as widely implemented (UK NHS, US Veterans Admin) and has it's challenges as well). [1] http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/2012-medical-loss-ratio-report.pdf http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-R...
  - lhc- 13y ago
    Because Obama was unable to garner enough support for Single Payer... at least, not yet. While the ACA is hardly a perfect law, its quite possible that the greatest thing it accomplishes is showing Americans how much worse our current system is than the Single Payer systems the rest of the 1st world employs. While the insurance companies were generally lobbying for the ACA (although there's definitely clauses they did not support), they are vehemently against Single Payer, since it puts them all out of business.
joshuahedlund 13y ago
> It still boggles my mind that people are surprised by this. I agree with your mathematical observation, but maybe part of the surprise that such math was often underplayed or outright ignored in the claims that premiums would be going down, ex. [0][1]) [0] http://www.washingtonpost.com/blogs/fact-checker/post/president-obamas-claim-that-insurance-premiums-will-go-down/2012/08/09/424048f2-e245-11e1-a25e-15067bb31849_blog.html http://www.washingtonpost.com/blogs/fact-checker/post/presid... [1] http://www.nytimes.com/2013/07/17/health/health-plan-cost-for-new-yorkers-set-to-fall-50.html?_r=0 http://www.nytimes.com/2013/07/17/health/health-plan-cost-fo...
001sky 13y ago
It still boggles my mind that people are surprised by this. Mathematically, ... Its an interesting social phenomenon, that large-scale opaque repricing of a commodity is met with opportunistic ~scalping. This happened accross europe during the conversion to the Euro. US consumers are probably rightly suprised. Despite the expectations of economists that the euro change over would have no effect on prices, European consumers perceived the opposite. To shed some light on this puzzle, we develop a model of imperfect information in which cheaper goods experience higher price growth after the changeover. Retailers, aware of consumers’ difficulties in adopting the new currency, use currency changeovers to increase profits by in creasing prices. The lower the price transparency after the changeover, the higher the euro–related inflation. Using data on inflation (Eurostat) and price levels (Economist Intelligence Unit), we show that although the euro changeover did not significantly increase inflation, it nevertheless had distortionary effect on prices. {etc} http://www.kellogg.northwestern.edu/faculty/dziuda/personal/pdf/jcmb_veryfinalrevision2.pdf http://www.kellogg.northwestern.edu/faculty/dziuda/personal/...

jamroom 13y ago

Just want to add another data point, that here in Washington State, a comprehensive plan for my family is going to be around $600 less per month under Obamacare than what I can get right now. This is without any subsidies of any kind, so while I know it is just 1 extra data point, I consider myself a "typical case" (3 dependents, 1 pre-existing condition). I can say that the Manhattan institute's numbers (what the Forbes article is based on) for Washington appear to be incorrect (based on just my experience though), as they list a premium for a 40 year old man to be currently $181. I've been buying individual health care for myself and family for the last 8 years, and maybe back in 2006 it was about that price. A "comprehensive" plan in Washington would easily set me back ~$1300 per month for my family of 5 - under Obamacare the same (or even sightly better) plan would be around $750. I currently only carry a "catastrophic" coverage plan, and even with a $7500 deductible it's still $600 per month. So for me I'm looking forward to Obamacare.

powertower 13y ago
The problem here is that for some people's coverage to be lowered, impoverished people to be covered, and pre-existing conditions paid for, a bunch of young and healthy individuals (without families) are now required to sign up for insurance. And the cost of that insurance for those healthy individuals is now 2-4x more expensive than it would have been before Obamacare took place (obviously the money has to come from somewhere to balance it all out). *This is of course for the lower and mid level coverage plans, the higher end stuff reduces that margin between the pre and post levels - but not for everyone, and in some cases people are going to pay 15-20% of their TOTAL income for worse plans. And that's going to enrage those people.
- jamroom 13y ago
  Of course - that's the whole reason for the mandate. Similar to social security, there needs to be a pool of people paying into the system that are not using it. I don't agree with you that the plans will be worse though - maybe in some states, but certainly not here in Washington.
  - 13y ago

SeanLuke 13y ago

Citing Avik Roy does not help your claim. See http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/01/the-shocking-truth-about-obamacares-rate-shock/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/01/t...