Obamacare Spin 101: How to make premiums seem really cheap – or insanely expensive

July 29, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.

Late Friday, Maryland published the final prices for health insurance plans on its marketplace, which will launch Oct. 1. What happened next is something I like to call Choose-Your-Own-Health-Reform-Adventure, a little-known and probably quite unpopular edition of the beloved young adult series.


(Nathan Penlington/Flickr)

Maryland put out the raw data, including exactly how much it would cost adults, young and old, to purchase health coverage. There were lots of ways to understand that information. Here's the headline that The Washington Post ran Saturday on new rates:

That sounds like great news: When you stack up Maryland's insurance rates against the rest of the country's, they come in significantly lower. Part of this has to do with the structure of Maryland's insurance market: Regulators have final approval rights on insurance rates, meaning they can tell health plans to reduce initial premium proposals. And this headline makes it seem like the process is working, and Marylanders are getting a great deal.

That was our headline. But there was also this headline, in the Baltimore Sun, that would likely leave readers with a much different impression of health costs under Obamacare:

The Sun covered the exact same data as The Post but instead compared the new rates against the rates offered in 2013. The paper homed in on one specific rate filing, from Aetna, noting that the "highest rate increase of 25.4 percent was granted" to the national health plan.

The two headlines have completely different connotations. One makes it seem like Marylanders are getting a great deal under Obamacare, and the other makes the law seem like a pretty lousy deal. And they're both based on the exact same facts. It's true that Maryland's premiums are lower than the rest of the country's, and that one carrier was allowed a 25 percent increase.

Does one headline better capture the experience that Marylanders will have in 2014, whether they'll actually feel like they're getting a great or lousy deal?

It is true that they will likely pay significantly less than Californians. You can see that here, in an analysis from Maryland, which compared what prices 20 and 50-year-olds would see locally and elsewhere. Overall, 25-year-olds will have access to a plan that costs between $114 and $124 per month, before using any tax subsidies.

 

 

 

 

It's also true that, for the 3,325 Marylanders enrolled in Aetna's individual market plan, that  if they do not use any tax subsidies, their rates will increase by 25.4 percent. You can see that in this chart, provided by the Maryland Insurance Administration:

Other insurance plans, it's worth noting, will see significantly smaller jumps. The 10,530 subscribers to CareFirst BlueChoice will have an average premium increase of 11.3 percent. Kaiser Permanente subscribers will have rates go up by a relatively small 4.3 percent.

To add yet another layer of complexity, all of these rates represent premiums without any tax subsidies. Maryland expects that about three-quarters of the people who buy health coverage on the marketplace will have some form of federal assistance, meaning they will get a discount off the sticker price. In other words, the Aetna subscriber may not experience a 25 percent rate hike after all, after tax subsidies kick in.

In short, health premiums are complex. Comparisons to other information can make rates seem like a bargain-basement deal or an outrageous ask. It all depends on which health-care adventure you choose.

KLIFF NOTES: Top health policy reads from around the Web. 

More doctors are opting out of Medicare. "The number of doctors who opted out of Medicare last year, while a small proportion of the nation's health professionals, nearly tripled from three years earlier, according to the Centers for Medicare and Medicaid Services, the government agency that administers the program. Other doctors are limiting the number of Medicare patients they treat even if they don't formally opt out of the system." Melinda Beck in the Wall Street Journal

Enroll America is canvassing the country, searching for the uninsured. "Spencer is one of hundreds of volunteers for Enroll America's 'Get Covered America' campaign, which canvassed neighborhoods across Florida, New Jersey, Ohio and several other states Saturday to kick off several months of outreach efforts. The group, which is funded by health insurers, hospitals, philanthropies and others, has close ties to the Obama administration. It's trying to educate consumers about new insurance options and drive enrollment in the new marketplaces opening this fall for coverage that takes effect in January." Phil Galewitz in Kaiser Health News

Courts are divided on the health law's contraceptives mandate. "A federal appeals court ruling Friday increased the chances that the Supreme Court in its coming term will need to settle whether secular, for-profit corporations must provide contraceptive coverage to employees despite the owners’ religious objections. A divided panel of the U.S. Court of Appeals for the 3rd Circuit ruled that a Pennsylvania cabinet-making company owned by a Mennonite family must comply with the contraceptive mandate contained in the Affordable Care Act." Robert Barnes in The Washington Post

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