Cohn: Anatomy of a Bogus Obamacare Argument

300px-Obama_signing_health_care-20100323-crop1Obamacare exchange premiums in California were published a few weeks ago, and the news was good.  Premiums are significantly lower than anyone predicted.  The “exchange” idea is working out to the benefit of people trying to get under the umbrella.

So you had to know that Obamacare critics would be looking for the gray lining.  The other day conservative critic Avik Roy took his shot, and it turns out to have been a singularly dishonest foray.  He looked only at very unrepresentative demographics (healthy, non-smoking 25-year-old and 40-year-old men) and then pretended that the teaser rates that eHealthInsurance.com puts on the front of their web site for those shoppers would hold up.

Jonathan Cohn has this to say:

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If you’ve ever tried to buy insurance on your own, you have a pretty good idea of how ridiculous Roy’s experiment was. If not, go and read Ezra Klein and Rick Ungar, who over the weekend pointed out each of the many flaws. Among the problems they identified: The prices a consumer sees on eHealthInsurance are classic “teaser rates”—in this case, available only to people who don’t have pre-existing conditions. A 25-year-old with a history of allergies, or diabetes, or repetitive stress injuries, or mental health problems, or any number of other common conditions could not have gotten that rate. In fact, that 25-year-old might not have been able to get insurance at all. “That’s not just comparing apples to oranges,” Ezra wrote. “It’s comparing apples to oranges that the fruit guy may not even let you buy.”

And it’s even worse than that. Insurance bids from eHealthInsurance are for new customers only. Insurers who sell to individuals—that is, insurers who sell in the “non-group market”—frequently raise rates dramatically, and unpredictably, because a particular group of customers have become too expensive to insure. In other words, if you buy on eHealthInsurance, you might get a reasonable rate the first year, only to experience eye-popping increases a year or two later. That won’t happen on the exchanges, because, under Obamacare, insurers can’t charge different prices to new and existing customers.

But the most amazing part of Roy’s entry was what it didn’t say. Roy never acknowledged that, even as young and healthy people would have to face higher premiums, older and sicker people would face lower premiums. He said absolutely nothing—not a single word!—about the federal subsidies available to people with incomes below 400 percent of the poverty line. (That’s about $46,000 a year for a single adult, or $94,000 for a family of four.) This has been a pattern with his writing and, unfortunately, much of what I read on the right. Articles focus on the drawbacks of Obamacare but almost never acknolwedge the benefits.

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We are not having an honest debate about the benefits of the program.  If this is the way opponents have to argue, then that seems to me to say something quite damning about their position.

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