Everybody's Happy!

Friday, August 2, 2013



A billion here, a billion there, and pretty soon you're talking real money.
Senator Everett McKinley Dirksen (1896-1969)

The new rates are out!  The new rates are out!  The Cleveland Plain Dealer reported today (won’t be able to say that much longer) that we finally have the new individual rates under the Patient Protection and Affordable Care Act (PPACA).  These are the prices that Ohioans will pay if they purchase coverage through the new exchanges.  And everyone is thrilled.  Positively giddy.

Mary Taylor, Lt. Governor and Insurance Commissioner, announced that our rates will be going up an average of 41%.  The Ohio Department of Insurance is projected our average adult premium will be $332.58 per month.  The Democrats were happy since they were worried that the number was going to be higher.  The Republicans were celebrating another opportunity to complain about escalating costs.  And average Ohioans, numb from way too many political ads last November and the recent budget shenanigans, chose to focus on the streaking Cleveland Indians.

Of course, loving the numbers wasn’t really good enough for either side.  Thankfully there are plenty of chances to evangelize their message and fight with the other side.  And everyone has a dog in this fight.

Approximately 80 – 90 percent of the people purchasing policies on the public exchange will qualify for a subsidy from the federal government.  As we have discussed previously, the federal government will help you pay your health insurance premium if you earn between 100% - 400% of the federal poverty rate.  That means if you earn less than $45,960 as a single or $94,200 as a family of four, you may qualify for assistance if your employer doesn’t provide adequate group health insurance.

The left is happily furious that Ms. Taylor reported the real number, $332.58, and not what someone might pay if he/she qualifies for a subsidy.  The Plain Dealer article notes that a 30 year old making $30,000 per year would have a premium of $285 per month, but that the federal government would cover $76 of that monthly fee.  Our hypothetical 30 year old would really have a premium of $209 per month.

At the risk of appearing to take sides – BALONEY!

1. The premium really is $285.  Some of it will be paid by the insured and the rest will be paid, in real dollars, to the insurance company.
2. That $76 is actually $912 in year one.
3. President Obama postponed the employer mandate, the tax that was scheduled to cover the cost of subsidizing the individual policies.
4. The uninsured 30 year old that was in my office yesterday was thrilled to acquire a health policy for $92.39 per month.  She would not have purchased a $209 policy.  And yes, coincidentally, she is a hairdresser making $30,000 a year.

The good news is that if my 30 year old hairdresser is forced to purchase a policy through the exchange next year, she will be acquiring maternity coverage at no additional cost.  She doesn’t think that she needs it, but it couldn’t hurt.  My healthy thirty year old male clients are looking at larger price bumps without a meaningful increase in benefits.

The Patient Protection and Affordable Care Act was supposed to be revenue neutral.  Sure there were costs associated with implementing the bill, but there were sources of revenue, too.  The first to disappear was the CLASS ACT, a program that was to pay for long term care eventually but front-load some early money for the PPACA.  That program ended almost two years ago.  The real money stream was to come from the employer mandate.

The nonpartisan Congressional Budget Office has estimated that delaying the employer mandate will cost us $12,000,000,000.  The Washington Post also reports that the CBO estimates that as many as 1 million fewer people will be insured due to the delay.

While the left denied the existence of mathematics, the right pretended that everyone in our country has access to comprehensive health care.  Blinders on and fully aware that their actions are equivalent to doing nothing, the Republicans of the U.S. House of Representatives voted today for the 40th time to repeal all or most of Obamacare (PPACA).  Then they went home for the summer recess.  This vote was so irrelevant that the major new outlets ignored it.

But back to Ohio.  Our rates are going up, but it could have been worse.  If you are unhealthy, pregnant, or earning less than 400% of the federal poverty level, the policies may prove to be a good deal.  And if you’re not, well the Indians are 60 – 48.

DAVE

www.bcandb.com