The Big Lie: Insurance Premium Costs

In case anyone is interested, here is the CBO analysis everyone is claiming says premium costs will go up or go down. You can see for yourself who is lying and who isn’t. Or, who is maybe not lying but instead is reporting the numbers in a way that seems to favor the lie.

For example, The Note claims the CBO analysis says “The net effect of those three factors: Premiums would be 10 to 13 percent higher for the average policyholders.”

This is deceptive The 10 to 13 percent figure applies only to non-group policies. Since the overwhelming majority of people are in group plans, the “average policyholder” is in a group policy. The same analysis shows group policy costs to remain about the same, give or take one percentage point.

Someone not reading carefully, such as Jammie Wearing Fool, might easily take away from the Note that the cost of most people’s insurance policy’s will go up. Not so.

Further, the increase for non-group policy costs comes from the assumption that people will choose to purchase more comprehensive policies. As Ezra explains,

CBO expects prices in the individual market to rise by 10 or 12 percent, an expectation driven entirely by predictions that individuals will purchase policies that are much more comprehensive, and thus somewhat more expensive, then the insurance they can afford now. … as the CBO explains on page five, part of the increase in the type of insurance being purchased is the result of “people’s decisions to purchase more extensive coverage in response to the structure of subsidies.” In other words, the change is driven by the subsidies, not offset by them.

However, if you keep the non-group policy you already have, the premium cost should go down.

8 thoughts on “The Big Lie: Insurance Premium Costs

  1. I’ll be keeping the non-group policy I’ve got, thanks. High deductible (but I’m sadly very healthy, in the sense that I don’t get much for the insurance I buy, on a procedures-paid-for basis).

    Oh, and although my pay is being cut dramatically, my premium is going up 10 percent for the next year. Deflation, forsooth!

  2. However, if you keep the non-group policy you already have, the premium cost should go down.

    Nonsense. ObamaCare explicitly makes my non-group plan illegal.

    I have a “high-deductible” plan that does not (currently) pay “first dollar” for “preventative health care services” like colonoscopy or mammograms. It also has no maternity coverage (I’m single, 45, male) or mental health coverage.

    Due to the coverage mandates in the “compromise” – In 2013, I will be fined (taxed) for being in a ‘non-compliant’ plan, and nobody else will be allowed to join this plan in the future, thus subjecting the plan to the same “death-spiral” that Anthem California’s non-group plan recently suffered.

    Did you watch the “show” today? Obama doesn’t think a “high-deductible” plan is real insurance…

  3. Obama doesn’t think a “high-deductible” plan is real insurance…

    That depends on how high the deductible is. Anyway, I could explain to you why doing away with such plans is necessary for making the whole reform plan work for everybody, but I suspect you are too selfish to care. Have a nice life.

  4. Oh, MSNBC, why? Why are you making those of us on the West Coast who just got home from work and want to catch up on what happened listen to team analysis featuring Chris Matthews, Savannah Guthrie and Chuck Todd. Much as I want to see the footage of the actual back-and-forth, having to endure that trio in between is just too much.

    (I thought yesterday they promised me Keith Olbermann, which makes me worry about Keith’s ailing father’s condition.)

    At least I got through enough to see the Obama rebuttal of Lamar Alexander on the CBO analysis.

  5. Fletch, I can understand your individual situation, but the whole idea behind using groups as a way to get affordability is to include everybody. You may not have a child or a mastectomy, but those are services your mother or sister may need. They don’t have to deal with prostate cancer, but you don’t have to get mammograms. If we cut up the population into exclusive groups, we’ll never get anywhere.

    You don’t need mental health coverage? Fine. You may in a few years. Will you know to get a better policy that year? If you save by accepting a policy without preventive care, who pays when late diagnosis of a condition costs more to treat? You’re 45, so your years of needing more coverage are coming. When do you think you should start paying for it? Since premiums in any one year after you develop a serious medical problem will not cover a big year of claims, why should more coverage ever be available to you?

    This notion of rugged individualism/survival of the fittest is a self-aggrandizement that serves the Republicans well, till they can get on Social Security and Medicare.

  6. The situation with Toyota is an example of why government intervention in the marketplace is essential. If there is no accountability to standards of construction and safety, you can build cheap, pretty cars that are death traps on 4 wheels. I’m not slamming Toyota – Ford stepped on their own crank with the Pinto – and spent years recovering from the memos that showed they knew the car was a firebomb in a rear-end collision.

    Insurance is a product we understand as well as we do our cars. One reason we don’t have to be mechanics or engineers is because of standards that all cars sold in the US have to meet. That’s why there’s always a horn, mirrors, hood safety latch, emergency brake, padded dash, and a million features that are required, and a process for recall if they fail in real life.

    If you are not a lawyer, you believe as a matter of pure faith (or hope) that the policy will do what you were promised. If you’re not a doctor, you probably didn’t know what questions to ask about what the policy might not cover. Deductibles and co-pays, etc work good in ordinary circumstances – so it’s all OK.. But if you get in a serious medical jam requiring hospitalization, dialysis or expensive surgery – that’s when you find out if the carrier has clauses, caps or exclusions that are a gateway to bankruptcy -or a death sentence. As I research the offenders, I’m amazed that the most vile offenses are committed by the major companies.

    At the moment, there are no national standard for what a medical insurance policy has to be. Some states do a good job of regulating – many do not, particularly where industry lobbyists work freely in state capitols. Proposed reform would set standards for policies – and create a few agencies who would evaluate policies for compliance.

    There’s no middle ground here. Either you see it’s the role of government to prevent predatory practices – or you believe the free market will sort it all out. Which it will. Use the same tactic to teach your kids to swim fast – toss them in a shark tank. The survivors will all be fast swimmers. I can’t argue with the results, it’s the method that’s offensive.

  7. My plan, with the “first dollar for diagnostic/preventative care” is cheaper than the same plan without that. I think Fletch could save some money.

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