Today’s myth about ACA/Obamacare is that “my insurance premium is going to go way up.” The issue of health insurance premiums is something that can raise the hair on anyone’s neck. It seems like every which way we turn costs are going up, whether it is for groceries, gasoline, plane tickets and all types of services or insurance. The Republicans/Tea Party report with “glee” the “fact” (and I say that loosely) that insurance premiums are going up, yet the Democrats say premiums are going down. They can’t both be right, so who is lying. Well, if you are a Republican and I say premiums are going down, you will think I am just pulling for the Democrats. If I say the premiums are going up, Democrats will surely say I am a Republican. The truth is however is much simpler. Neither party is lying, it’s about how they used the numbers and manipulated the data to get it to reach their desired conclusion.
While I am a social worker/therapist I do love math and my professors at UTA believed that the only way we could determine if new treatment methods were valid was by knowing how to read, evaluate and conduct scientific investigations. When I read data I look far beyond the supposed findings to look at the real numbers. It is in understanding and analyzing the data that the truth about premiums is unveiled.
First, you have to understand that states were given the ability to set up the exchanges in any manner they desired. All health exchanges, at least in this first year of operation did not put any cost containment rules into practice. Whaaaaat? This means any insurance company participating in the health insurance exchanges could set their rates as they saw fit. Therefore, within the the spectrum of the health insurance exchange, there are many different plans which might be substantially different in terms of cost. If you simply average the cost of all the plans, the cost of health insurance premiums could look much higher than it really is, (plans that charge the same old inflated costs) or lower than it really is if some health insurance company comes in and “lowballs” the other plans in an attempt to build it’s own business. Both of these cases would yield skewed results. That is why it is better to use the median rather than the mean or average.
Okay, Lynne enough with the math, could you put that in English. If you have 5 numbers 1,2, 2, 1 9 and you add them up, you get 15. Now divide it by 5 and you get 3. This is the average of the numbers. When doing a scientific investigation the nine is considered an outlier because it causes the value of the mean (average) to be artificially high. The median is a better option. When figuring the median, you line up the numbers from lowest to highest: 1,1,2,2,9. You then count to the middle which in this case would be the third value or 2. This decreases the impact the nine has on the variable being studied and more clearly defines what the typical middle would be.
Sheesh, try it again Lynne. Okay, so there are several things that every insurance plan must offer due to implementation of ACA. They are as follows:
1)No annual or lifetime limits on the dollar amount your plan will pay for medical care
2)Access to preventive health services with no cost-sharing (i.e., no co-pays)
3)Coverage for dependents under the age of 26 (on their parent’s plan)
4)The right to choose your primary healthcare provider and to see pediatricians and
obstetricians/gynecologists without a referral
5)The right to appeal coverage denials to an independent reviewer outside your plan
6)Protection against unfair premium increases and rebates to you or your employer if
your health plan spends less than 80 percent of premium dollars on healthcare
7)Access to summaries of your plan’s benefits and costs in simple, plain language to
help you understand your coverage and compare coverage options.
These are the basic items every insurance plan must now cover. Many plans will cover much more than this, but in this aspect they will all be similar. This is a very important item to understand when you begin looking at the health insurance plans offered in the new exchanges.
Now we have to relook at insurance premiums. Let’s use New York as an example. New York’s exchange may have more than 21 different plans to choose from when people begin to enroll in the exchanges October 1, 2013. These 21 plans range from $400.00 per month to almost $1000.00 per month. Why the big discrepancy? Each insurance company, as I noted above, could make their premiums anything they wanted. It appears that the biggest health insurance companies who have had quite a monopoly in the business are sometimes 2 and even 3 times higher than other plans, yet they all contain the same basic benefits. In fact, in Oregon, insurance companies informed the state what their rates were going to be in May, 2013. In August, they notified the state of their desire to decrease premiums. Why? Their rates simply were not competitive with others offering the same benefit. That is how an open market is supposed to influence cost. Health insurance companies will now compete for enrollees. It is “some kind of wonderful.”
Back to the point of where the truth lies about premium costs under ACA/Obamacare. Both the Republicans and the Democrats are telling the truth….to a certain point. The Republicans averaged the cost of all the programs including the highest priced premiums to support their argument. Unfortunately, they skewed the data in order to get the results they wanted. Whenever you have variables that fall outside the typical parameters, they should be noted but dropped from the statistical equation. In this case, the Republicans/Tea Party used the data to fear monger and raise the anxiety and anger of the American people about ACA. Their findings are in actuality false because their statistical reference does not utilize appropriate scientific data collection. The Democrats, on the other hand, used the median to configure their findings which suggest that premiums will stay the same or in most cases be less.
This is a very long, convoluted way of giving you the good news. Health insurance premiums will go down for most people under ACA/Obamacare AND we haven’t even talked about the subsidies yet. Look for my next article on how and for whom the subsidies will help decrease the cost of health insurance premiums.
The point is we busted another myth today. I am happy to say that based on the scientific evidence health insurance premiums at the very worst will stay about the same, but in most states consumers will have the choice of paying a lower premium.