Obamacare Health Insurance a Bad Deal for Floridians: Part I

usedcare“We passed health reform — yes, I like the name ‘Obamacare’ — so your insurance companies can’t jerk you around anymore.” President Obama, 10/18/12

Last year in the closing weeks of the Presidential campaign President Obama finally embraced the name “Obamacare” for the Affordable Care Act.  Among the many promises made by the President was that “You could keep your doctor and insurance plan. Period”.  Promises were also made that insurance rates would be $2,500 lower by the end of his first term.  However an analysis of the insurance rates planned for the health insurance “Exchanges” this week by the department of Health and Human Services reveal a vastly different story.  Independent analysis by the Sun Beam Times reveals that insurance rates will be higher for many than pre-existed Obamacare and higher than even on the current Florida market.  Over the next several weeks, the Sun Beam Times will continue to analyze the health insurance exchange as it rolls out to evaluate Obamacare’s insurance impact on the lives of Floridians and Americans.

The HHS report released this week from the office of the “Assistant Secretary for Planning and Evaluation” (ASPE) proudly proclaimed that health insurance rates would be 16% lower than “expected”.  However, evaluation of the fine print reveals that this is akin to a used car salesman placing a $10,000 sticker price on a lemon and then proudly announcing that the management is reducing the price to $9,000. As it turns out the car was never worth more than $2,000 and wont’ get you where you want to go 40% of the time.

The ASPE analysis admits that when it calculated the insurance rate average it did not include rates from two of the states with the highest insurance rates in the nation: Massachusetts and Hawaii.  The data is also highly cherry picked with only the “lowest” priced plans included in calculating its averages. An independent analysis by Avik Roy of the Manhattan Institute reveals that insurance rates are actually higher for most in the nation under Obamacare than they were before Obamacare – a far cry from lowering insurance premiums $2,500. Rates will nearly double for men and increase by 62% for women for individuals purchasing insurance.

The Sun Beam Times evaluated the insurance premium provided through the ASPE’s online database to evaluate premiums.  These were compared to premiums offered through a private online marketplace (e-health insurance – a non-governmental exchange in existence for years!).  The lowest cost policy under Obamacare’s govenrment-run exchange (eligible for a federal subsidy) would cost $2,300 per year for a plan that covers only 60% of the actual medical costs of a patient.  That plan will be a massive HMO with strict restrictions on doctors, hospitals, medicines and treatments available.  That plan is $1,100 more expensive than a better plan available now providing better coverage of doctors, hospitals and treatments with a very similar out of pocket expense. Thus, under Obamacare a 27 year old making $25,000 per year (the example used by the government) would have to buy insurance that consumes 9% of his income to get the cheapest insurance available and provides less coverage. To get a slightly better plan (the silver plan) that 27 year old would need to spend 11% of their income (for a $2740 plan).  All this under threat of an IRS penalty of $95 if insurance is not purchased. That 27 year old is thus very unlikely to buy that insurance when they can pay a $95 penalty and then get the insurance later at no penalty when they do get sick. That will drain the pool of the money President Obama needs from the young and the healthy to pay the costs of the older and the sicker.

Insurance under Obamacare is delivering a lot less than promised, will cost more and is on unsound economic ground.  In upcoming posts, the Sun Beam Times will evaluate what kind of insurance is available, the value of subsidies, perks for the insurance companies, what insurance covers (and does not cover), and  the impact on doctors, hospitals and medical care available. The Sun Beam Times will also compare the Obamacare’s insurance to better alternatives.