October 23rd, 2013

Fixed!

[NOTE: Lots of updates below.]

Oops, never mind, says Emily Litella.

By the way—why didn’t the government site just borrow this calculator, the one I’ve been using in my post-rollout reseach? It seems to work just fine, and gets the right premium figure for the 62-year-old subsidy-ineligible woman featured in the piece.

They’re fools or knaves, probably both, no doubt about it. This is absolutely basic: premiums vary depending on age, even with Obamacare. The only state in which they don’t (as far as I know) is good old Vermont, where everyone is equal, holding hands and singing Kumbaya as they eat their Ben and Jerry’s:

Vermont now has the fifth highest health insurance premiums in the country, in part because of state regulations limiting competition. There’s no reason to believe that will improve, as only two companies are offering plans under the exchange. At this stage, unsubsidized rates in the exchange have increased considerably. Any models showing a decrease in premiums are based on a high percentage of enrollees qualifying for subsidies. In addition, the viability of that model is dependent on a large number of the young and healthy paying into the system.

Vermont utilizes the “community rating” method to determine health insurance premiums. The intention of this method is to ensure that rates on particular policies are the same for everyone regardless of age or health. That means that a 57-year-old man will pay the same rate for an individual policy as a 27-year-old woman. Good for the 57-year-old man, not so good for the 27-year-old woman. Cynthia Cox, a health-care economist at the Kaiser Family Foundation, explains, “Younger people will have higher premiums in Vermont than they might if they lived elsewhere, whereas older people might have lower premiums than if they lived elsewhere.”

In other words, without a pool of younger, healthier participants, it’s difficult for any insurance plan to survive.

[Hat tip: Legal Insurrection.]

[ADDENDUM: It seems that another state with community rating re age is New York. Several other states limit how wide the variation between premium prices for young and old can be. Obamacare limits this ratio as well. But all states except New York and Vermont vary premium prices based on age, with younger people paying less, for obvious reasons. New York is better off than Vermont in this regard because its population is younger and Vermont's older. See this for much more about Vermont's unique problems.]

[ADDENDUM II: This pending court case has the potential to throw a large monkey wrench into the Obamacare works. I find it hard to believe that it will actually end up doing so, though, even (or especially) if it goes to the Supreme Court.]

[ADDENDUM III: Does this mean they'll all apologize to Ted Cruz, the terrorist? Nah, not so much:

CNN reporter Dana Bash tweets "new: senior dem source tells me to expect every sen dem running in 2014 to back @JeanneShaheen proposal to delay #ACA enrollment deadline."

Just a little while back they were refusing to delay the mandate as the Republicans asked. Now they're begging for it. I wonder what changed :-).

Bryan Preston remarks:

A unified Republican Party could make great use of this turn of events. Let’s see how the actual Republican Party handles it.]

17 Responses to “Fixed!”

  1. Don Says:

    Does this mean we will see young people leaving Vermont?

    Will they take their leftist ideas, intact, to their new location?

  2. neo-neocon Says:

    Don:

    There aren’t so very many people in Vermont, young or old.

    But my guess is that the young people who don’t have enough money will just opt out rather than move away.

    And by the way, the penalty has very little teeth at the moment.

  3. LisaM Says:

    The premiums are almost beside the point. Have you seen the deductibles? Mine would be $6,000 in network, $13,000 out of network. The current deductible for myself and my son is $2000. Thank God I have insurance through my employer – for now.

  4. neo-neocon Says:

    LisaM:

    People who get subsidies can get breaks on the co-pays and deductibles, too, if they earn less than 250% of the poverty level for their family size. The rest of you “rich” folks will just have to pay up.

  5. Baklava Says:

    Well… me and my 6 person family will not qualify. I’m above the 250% above the poverty line…

    But I don’t want a subsidy.

    I want a free market.

  6. neo-neocon Says:

    Baklava:

    I bet you might qualify. Remember, for you it would be the poverty line for a 6-person family, and you would be entitled to get premium subsidies (not copays or deductibles, but premiums) up to 400% of poverty level.

    Plug it into the calculator at the link I provided. You’d still be getting subsidies if your income was $125,000 (I was plugging in an age of 45; I don’t know your real age so that was just a guess). It would be a small subsidy at that level ($15 a month). If your income was $80K, for example, you’d get a lot more subsidy: $457 a month. People with large families have a higher poverty level, so they get subsidies at higher income levels.

    You don’t have to take the subsidy, but it’s there.

    However, if you have insurance available through your employment, the rules change drastically and you would be less likely to qualify for subsidies at the same income. For example, your employment-insurance premiums if you were a single person of the same age would have to have been over 9.5% of your income to qualify for subsidies. So let’s say your income was $80K; 9.5% of that is $7600, and so premiums through your workplace health insurance for a single man of 45 would have to be over $7600 a year ($633 a month) for you to qualify for subsidies on the exchanges.

    In other words, for the most part (especially if they have families), people who have employment-based insurance have more much stringent requirements in order to go on the exchanges and get subsidies. They can go on the exchanges and pay full price, of course, but why would they do that, and forfeit whatever their employer is paying? But unless the employer contribution is large, my sense is that most people are doing worse getting insurance through work than they would if they were allowed to drop it and go on the exchanges, because most people would qualify for subsidies that would be higher than their employers’ contributions.

    It’s complicated. It’s even complicated to try to explain it, even though I think I understand it.

  7. Mr. Frank Says:

    From listening to “experts” on cable TV it seems that a delay of ObamaCare is the kiss of death. The assumption is the people who are ill and unable to get insurance will sign up, even if it is a labor intensive effort. Young healthy people relieved of the mandatory requirement and fine will delay signing up. The effect is a very fiscally unworkable program. At that point additional appropriations and taxes will be necessary to rescue the program.

  8. parker Says:

    “From listening to “experts” on cable TV it seems that a delay of ObamaCare is the kiss of death……. The effect is a very fiscally unworkable program.”

    Like SS, Medicaid, and all other ‘social welfare’ programs; Obamacare is fiscally unworkable in the long run. All ponzi schemes eventually implode. IMO efforts to delay Obamacare are a huge strategic mistake. The House should dig in their heels and insist on full implementation 1/1/14 and demand the law, as upheld by SCOTUS become the law of the land with no exceptions or exemptions.

    “At that point additional appropriations and taxes will be necessary to rescue the program.”

    Pain does the body politic good. QE to infinity and debt past $20T will not survive the bond vigilantes. The markets may be unruly and prone to mob psychology, but eventually the markets reject what does not work. Let them all reap what they have sown. Welcome to the Greece in the New World.

  9. parker Says:

    “CNN reporter Dana Bash tweets “new: senior dem source tells me to expect every sen dem running in 2014 to back @JeanneShaheen proposal to delay #ACA enrollment deadline.”

    http://www.youtube.com/watch?v=FmKJ66X0QvM

    Poor, poor pitiful me. F&^%’em. Hang ‘em all out to twist in the wind… currently the wind in my corner of Iowa is blowing out of Alberta…. F&^%’em. They asked for this, now eat crow.

    The master speaks: http://tinyurl.com/qxkfbgc

  10. Richard Aubrey Says:

    In Michigan, BC/BS will sell one of a selection of good plans to any individual, pre-existing conditions notwithstanding. They do no underwriting, that being a condition of their charter some decades ago.
    They will not cover pre-existing for six months. So if you have cancer when you sign up, the first six months are on you, and then the Blues pick it up. if you have cancer when you sign up and fall off the porch, breaking your leg in the first week of coverage, the Blues will pay.
    This has prevented the costs and losses of adverse selection. However, someone trying to game the system by stopping at the insurance office on the way to Mayo could still be a poster child for the left/progs about the cruel insurance industry.

  11. MikeNC Says:

    Neo,

    Obamacare is designed to fail. Remember that recently in the shutdown the park service was told to make it painful on the public. I think the same thing is being done here with the rollout. When a government program goes bad, the solution is always more government. In this case that means single payer.

    Wayne Allen Root has an excellent short piece on this. I think he is on the money. Obama’s goal is not what people might think.

    http://www.foxnews.com/opinion/2013/10/21/why-obamacare-is-fantastic-success/

  12. JuliB Says:

    Completely OT, but can we expect a post about yahoo mail changes? The only way I can use it is by downloading my mail into outlook, but I think that’s because I pay for the premium service.

  13. Lizzy Says:

    Saw on a MSM news report today that the Obamacare site provides faulty figures because there are only two choices: 49 & under -OR- 50 & older. For the “49 & under” selection, the site uses age 27 to calculate the premium, and for the “50 & older” selection, the site uses age 50. Doesn’t take a genius to see that the smarty-pants HHS folks who came up with this requirement were setting up the system to come up with the lowest possible premium for both categories. This is a perfect example of why this site is such a disaster: it’s more important as a political tool (see how rates are cheaper under Obamacare!!), than in assisting its users. Meanwhile, state exchanges have the user enter their DOB so that they get much more accurate premium prices. Can’t imagine that correcting this on the Obamacare site (if they even have the desire to do so) could be done in 6 weeks.

  14. neo-neocon Says:

    Lizzy:

    That sort of bait and switch routine doesn’t even make sense as a political calculation. If people are told a lower premium by the website, and then find out it’s a higher premium, they’re not going to be happy Obamacare campers.

    Unless, of course, they are getting subsidies—as probably more than half the population will be getting. The amount of the enrollee’s contribution to premiums is set by his/her percentage of poverty level, and then the government makes up the difference between that and the premium amount. So even if the real premium is higher than the person was quoted, the amount he/she pays remains the same.

  15. Ymarsakar Says:

    So how much is Planned Parenthood and ACORn getting out of this Democrat deal?

  16. Don Says:

    Like SS, Medicaid, and all other ‘social welfare’ programs; Obamacare is fiscally unworkable in the long run.

    Sure, but the half-life of SS and Medicare have been sufficiently long that people will not blame the program but whatever Republican is nearest when the implosion occurs.

    Obamacare is imploding out of the gate. I think (hope) they will have trouble convincing more the 25% of the population that it is Bush’s fault.

  17. Ymarsakar Says:

    The black population know it is whitey’s fault. And Republicans are the party of the white rich in the MSM propaganda view.

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Previously a lifelong Democrat, born in New York and living in New England, surrounded by liberals on all sides, I've found myself slowly but surely leaving the fold and becoming that dread thing: a neocon.
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