In the conservative echo chamber, there is little doubt about Obamacare: It’s an unmitigated, costly disaster. In the real world, there is a fascinating, high-stakes question that still needs answering: How well will this restructuring of the health-care industry, workable in theory, operate in reality?
We won’t have a full picture for a long time. But, as the nation prepares for the phase-in of the law’s most important elements next month, we are starting to get real data back. And at least one major criticism — that the law will require people without employer-sponsored insurance to buy very expensive health-care coverage — looks increasingly weak.
A new analysis from the Kaiser Family Foundation offers the clearest picture yet of how much different sorts of Americans will have to pay for their coverage in the “exchanges” the government is setting up for individual insurance customers. Bottom-line costs will vary, as they do now, depending on where you live, your income, your age and other factors. But, “while premiums will vary significantly across the country,” the report concludes, “they are generally lower than expected.”
For example, we estimate that the latest projections from the Congressional Budget Office imply that the premium for a 40-year-old in the second lowest cost silver plan would average $320 per month nationally. Fifteen of the eighteen rating areas we examined have premiums below this level, suggesting that the cost of coverage for consumers and the federal budgetary cost for tax credits will be lower than anticipated.
The law’s backers have argued that competition among private insurance companies for the new customers that the law will draw into the exchanges will keep premiums under control. They may have a point. A few small states such as Maine and Vermont only have a couple of insurers participating in their exchanges. But most others in the Kaiser report have four or more competing for customers.
This, Matt Yglesias beat me to pointing out, is “good news for Americans who are currently uninsured, who currently buy insurance on the individual marketplace, or who think it’s possible that at some point over the course of their life they might have to or want to switch jobs.” And, “Since the level of subsidies available to families of modest means is keyed in part to the price of insurance premiums, this is also good news for anyone who pays taxes or uses non-health care public services.” So, a lot of people.
Yes, caveats. Though Kaiser’s is the most comprehensive analysis so far, its information is incomplete, using data from just 17 states and the District. And the report’s conclusions don’t mean that people won’t still have to pay a good chunk of their income for health insurance, even after they factor in federal assistance. “A 40-year-old with an income of 250 percent of the federal poverty level (roughly $29,000 per year) would pay about 8 percent of his or her income or $193 per month to enroll in the second-lowest-cost silver plan, regardless of the rating area,” the report calculates. Cheaper plans would be available. But it would still no doubt be easy for opponents of the law to find folks upset at their premiums.
Yet, Kaiser’s report indicates, those people would also have health-coverage options, regardless of their medical histories, at prices that won’t break their banks — or put unanticipated burdens on the federal Treasury.