Senior Policy Analyst
Avik Roy, repeating his claim that health reform will make insurance less affordable, criticizes the Obama administration for announcing various premiums that people will pay next year for coverage in the new insurance exchanges without comparing them to what people now pay. He quotes the charge by Douglas Holtz-Eakin, head of American Action Forum, that, “Instead they try to distract with a comparison to a hypothetical number that has nothing to do with the actual experience of real people.”
Then Roy proceeds to do just that.
Roy compares premiums for the cheapest individual market plans available in 2013 with the cheapest “Bronze” plans for people ages 27 and 40 available next year in the exchanges. This comparison isn’t apples-to-apples; it’s more like apples-to-avocados. It:
Under health reform, people who haven’t had access to the individual market will finally be able to obtain coverage, without being penalized or excluded because of their health problems.
Take Nebraska, where Roy says 27-year-olds will face the biggest premium increase under health reform. We examined the five cheapest plans in October 2013 in one zip code in Nebraska and found that none covered mental health services or substance abuse treatment, and two didn’t even cover prescription drugs, visits to primary-care doctors, or visits to specialists such as oncologists. Only one provided maternity coverage. And, two of these plans had a $10,000 deductible, meaning that enrollees must pay that much of their own money on covered benefits before the plan starts contributing.
In comparison, plans offered in the new exchanges will have to provide a comprehensive array of benefits (including all of those just mentioned) and limit what consumers pay out of pocket.
One other point is worth noting: 27-year-olds are not 27 forever. A healthy 27-year-old with bare-bones coverage may pay more next year for a better plan, but as she gets older or experiences health problems, health reform’s changes to the individual insurance market will mean she won’t have to worry about whether she has access to decent coverage.