Friday, September 6, 2013

Rate Shock

One of the many mantras from the Republicans against Obamacare from the beginning has been that insurance rates will skyrocket.  They were as sure of that as they were that the Supreme Court would rule it unconstitutional and that Congress would repeal it anyway.

And of course they were wrong about that.  Now they’re wrong about the insurance rates.

The main takeaway from an exhaustive new study of premiums on the Obamacare health insurance marketplaces: They’re generally going to be lower than expected, undercutting the persistent claims of “rate shock” by conservatives.

Marketplaces premiums are coming in below initial estimates, said the nonprofit, nonpartisan Kaiser Family Foundation in a new report released Thursday.

The expected monthly premium for a 40-year-old adult purchasing a silver-level plan (the baseline, which covers 70 percent of costs) on a marketplace had been $320, according to previous projections from the Congressional Budget Office. But in 15 of the 18 regions studied by Kaiser, the average premium will be below that — thus the study’s conclusion that the prices are going to be lower than anticipated.

“While premiums will vary significantly across the country, they are generally lower than expected,” the authors wrote.

The study does not compare marketplace premiums with current prices in the individual insurance market. Instead, that conclusion is based on how released prices are comparing to previous projections for coverage costs under Obamacare. It follows a report last week by RAND, which suggested that claims of premium increases had been overstated.

If Kaiser’s estimates bear out, it could be a big blow to one of the main conservative talking points against the Affordable Care Act: rate shock. Everybody from House Republicans to think tank types like the Manhattan Institute’s Avik Roy and the Heritage Foundation have been warning that consumers would see skyrocketing prices under the law.

“Higher health care premiums are the last thing single young adults and working families can afford,” the House Energy & Commerce Committee wrote in a March 2013 report purporting to demonstrate rate shock under the ACA. “Yet contrary to what the president promised, that is exactly what Obamacare is projected to do.”

This is their worst nightmare: the programs may actually work as promised, if not better.  The one saving grace for them is that they’re counting on no one remembering what they said before, and even if they did, they’ll lie their way out of it.