As Republican Senator Ted Cruz exhausted himself on the Senate floor overnight in an effort to prove his and his party's steadfast opposition to funding the Affordable Care Act, known as Obamacare, new data made available by the White House shows that state-level insurance exchanges set to open next week will offer premiums that are cheaper than even most forecasts predicted.
Image: U.S. President Barack Obama discusses healthcare reform at the Clinton Global Initiative in New York September 24, 2013. (Credit: Reuters/Kevin Lamarque)Of course, the premiums are averages, with fluctuations between states and regions as well as within certain economic groups, but according to a report by the Department of Health and Human Services, the average premium for mid-level coverage under the plan will be $328 a month.
As the Washington Post makes note, "Premium prices are influenced by many factors, including what insurers guess their costs will be, a region’s labor costs and how much hospitals and other facilities charge. Competition between insurers is also a significant factor."
With the exchanges officially opening on Monday, October 1st, Reuters reports:
The Obama administration is counting on signing up 7 million Americans in the first full year of reform through the state exchanges, including 2.7 million younger and healthier consumers who are needed to offset the costs of sicker members.
Debate over whether Obamacare will prove affordable for millions of uninsured Americans has been sharp during the past few months, as states have announced rates. States that have supported the law said it will lead to lower prices. Others that have opposed the reform - including Georgia, Florida, and Indiana - warned of "rate shock" for consumers compared to what they could buy on the individual insurance market a year ago.
HHS said the average price was 16 percent lower than its own projections on premiums. In addition, consumers who earn up to 400 percent of the federal poverty level, or $62,040 for a couple, will qualify for subsidies that will lower the price further.
As is always the case, conservatives are looking at the new data and highlighting how for some—like younger people who typically don't carry insurance or those who have the cheapest and least protective coverage—premiums may go up.
But as economist Dean Baker argued this week, the real improvement that Obamacare offers is the protections it gives to society's most vulnerable citizens, especially those who in the past have fallen victim to the cruel behavior of insurance companies that have refused coverage to the two groups of people who need it the most: the sick and the poor.
As Baker explains:
Most of the insured get covered through their job. This creates an obvious problem. If they develop a chronic illness, they may be unable to keep their job. Once they are no longer employed, workers will be left trying to buy insurance in the individual market.
Insurers don’t want to insure people who are sick. If a person with a chronic health condition applies for insurance in the individual market, they would be facing premiums of tens of thousands of dollars a year, making it unaffordable for all but the very wealthy.
This situation will end with the start of the exchanges. Workers who lose their job because of an illness will still be able to find affordable insurance. This will provide a huge element of security that is currently lacking. In effect, most workers will have true health insurance for the first time.
Likewise, because of available subsidies and the expansion of Medicaid included in Obamacare, the cost of coverage will become affordable to many previously left out of the system.
So what will this new insurance cost? Again—and everyone agrees on this—it depends.
According to McClatchy's review of the report on premiums put out by the HHS report:
...premiums in 47 states and the District of Columbia, on average, will be 16 percent lower next year than the Congressional Budget Office projected they would be in 2016 – when the marketplaces are at full capacity.
Roughly 95 percent of uninsured people who are eligible for marketplace coverage live in states where average monthly premiums for individual coverage is lower than expected, the report found. And the states with the lowest premiums have more than twice the number of plans offering coverage than states with the highest premiums.
Administration officials were clearly buoyed by the findings, which appear to support their claims that the Affordable Care Act would give consumers more choices and better rates by bringing more insurers into the markets.
Offering specific numbers, the Washington Post's Wonk Blog reports:
Across the 48 states for which data were available, the unsubsidized monthly premiums could be as low as $70 for an individual and as high as $1,200 for a moderate plan for a family of four.
The average national premium for an individual policy will be $328 in 2014, before including any of the tax credits that will be available to low- and middle-income Americans to help them purchase coverage.
So is it all good news? Hardly.
As many healthcare industry experts have long understood, most of what ails the nations's crisis of healthcare is the profit-based model of coverage that Obamacare does more to bolster than upend.
And according to advocates of a single-payer system or Medicare-for-All program, the implementation of Obamacare may help more people afford private insurance, but it will do too little to end a paradigm in which some people receive access to advanced forms of care and coverage while others languish uninsured and untreated.
"Contrary to many people’s expectations, the number of unprotected Americans will drop by only half when Obamacare is fully implemented," said Dr. David Himmelstein, representing Physicians for National Health Program, in a recent statement. "Even if all the as yet undecided states were to opt-in to the law’s Medicaid expansion," he said, approximately 24,000 people can be expected to needlessly die every year because they will continue to lack access to timely and appropriate care.
And Baker adds, "Private insurers are the sole providers of insurance [under Obamacare]. Not only are we not getting universal Medicare, we did not even get a public option, the right to purchase a Medicare-type plan that would compete with private insurers."
"The drug companies and medical equipment suppliers both end up as winners under Obamacare," he continues. "They will be able to secure even greater profits from their government-provided patent monopolies since the ACA does little to rein in costs."
Despite what seems like good news from HHS, progressive critics of Obamacare will still be urging a move to a single-payer, improved-Medicare-for-all program.
“Such a program would assure truly universal, comprehensive, high-quality coverage for everyone while simultaneously ridding us of the scourge of insurance-company-related waste, bureaucracy and profiteering,” said Himmelstein. “It would thereby save both lives and money.”
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