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If You Like Your Health Insurance Plan, You Can Keep It

I’ve called this a lie with an asterisk in the past, and I still refer to it as a lie with an asterisk. Strictly speaking, it wasn’t a lie. It was a rosy statement designed to reassure and sell a plan, while leaving out a bunch of information that would have sounded like the last 20 seconds of a 30 second pharmaceutical ad. You know, the part that warns that increased suicidal thoughts and anal leakage are some of the fabulous side-effects that you can look forward to if you ask your doctor about this drug. Here’s what the absolute truth would have sounded like;

If you like your plan, you can keep it*

*except for the 17% of you in the single subscriber market that get a cancellation letter every year, because your insurance company chooses not to offer your plan anymore since they’ve found a new way to screw you

*and the additional 1% of you in the single subscriber market that will receive a cancellation letter this year, because your crap plan doesn’t meet the new federal minimum requirements for health insurance

*and those of you in the employer provided market whose plans change every year because your employer needs to find a new way to tamp down the rising costs

That wouldn’t have sounded as good, and would have been much wordier than "If you like your health insurance plan, you can keep it", but it would have been more accurate.

Every time someone would crow about the huge number of cancellation letters that people were getting because of Obamacare, I would ask, "how many more cancellation letters went out this year, versus prior years?" I wasn’t asking the question to be cute, or clever. I asked the question because without that information, there’s no point there. So if 10 million cancellation letters went out last December, the logical question that any critical thinker would ask themselves, is how many cancellation letters went out in previous years? Without that information, 10 million is a meaningless piece of data. Since I never ask a question I don’t know the answer to, I had already done the legwork of hunting this information down. The answer was that we didn’t know. Those numbers lie with each individual insurance company, and they never release those numbers. They historically don’t release those numbers, and they certainly didn’t release those numbers for last December. So even though I didn’t know the answer to my question, I knew two things; the answer was unknowable and the numbers that were being thrown out for last December were completely fabricated. I didn’t know the answer to my question, but I did know that the "information" being thrown around was meaningless, and that the point that was supposed to be made with that information wasn’t made. 

But now I have a pretty good idea of what the answer is. Health Affairs just released a very well sourced report wherein they took a very close look at the individual insurance marketplace and came up with historical data on insurance cancellations. Here’s what they found out; historically, only 17% of those in the individual health insurance marketplace stay on the individual marketplace for more than two years. Why? Because most people get single subscriber plans only when they don’t have access to a public or employer based plan. In other words, people turn to the single subscriber insurance marketplace temporarily while they’re in the gap between full time employment. What percentage of single subscribers actually got cancellation letters in December? 18.6%, or 2.6 million people. Nowhere near that 10 million number that the noncritical thinkers loved to throw around.

So what happens for those 2.6 million people? From the report:

While our sample size of those with non-group health insurance who report that their plan was cancelled due to ACA compliance is small (N=123), we estimate that over half of this population is likely to be eligible for coverage assistance, mostly through Marketplace subsidies. Consistent with these findings, other work by Urban Institute researchers estimated that slightly more than half of adults with pre-reform, nongroup coverage would be eligible for Marketplace subsidies or Medicaid.

So over half of those people will either qualify for free coverage through medicaid, or get subsidies under the medicaid expansion. In other words, over 1.3 million of those people will be better off this year, than they were last year. That leaves us with about a million people who are maybe getting screwed by Obamacare. Why do I say maybe? Because we don’t know what their premiums were, versus what their premiums look like on the exchange. But a bigger problem than we not knowing the premium differences, is that most of them don’t know. From the Urban Institute Study:

Yet making the best enrollment choice may be difficult for consumers. HRMS findings show that many people are not aware of the new state Marketplaces, few know whether their state is expanding Medicaid, and many lack the confidence to enroll, make choices, and pay their premiums.

In other words, the disinformation campaign is working. People don’t know their options, and are very likely paying more than they need to. I personally have found this to be true while helping some of my Facebook and G+ followers with their quest to find health insurance. Granted, I have two advantages in that I’ve been following the ACA and changes to the ACA very closely, and I’m an HR professional with nearly fifteen years of experience in designing corporate insurance plans.

Health insurance is complicated and annoying on a good day when you’re not being fed a bunch of crap about how you’re fucked, and there’s nothing you can do about it. It’s exponentially worse when you’re being used as a pawn in a political chess board to take down a president. The health insurance doomsday crowd is going well beyond not giving a flying fuck about you; they’re actively encouraging you to screw yourself so that they can be right about something they’re completely wrong about. It’s needless and sad, and you should spend as much time as you have to spend to root out the information you need to protect your own self interest.         



We Won’t Be Calling It Obamacare By Next Summer

According to a Bloomberg article this morning, 100,000 people purchased insurance on the federal exchanges in November alone. That’s nearly 4x more than the nearly 27,000 who bought insurance on the federal exchanges in October.

127,000 enrollments nationwide may sound low, but it’s actually very promising for a number of reasons. First off, if you look at when people actually bought health insurance in Massachusetts when they rolled out their own Obamacare, you’ll realize that the lion’s share of enrollments will happen just before the deadline to buy. There’s no empirical reason to believe that the same thing won’t happen nationally.

Secondly, those 127,000 people represent enrollment in just the states who have governors that refused to help their constituents get affordable insurance. That number does not include people in NY, CA, KY, or the other twenty-three states who took the medicaid expansion and set up their own exchanges. California alone has enrolled 80,000 people, and Kentucky has enrolled about 50,000 people so that 127,000 federal enrollment number is already smaller than those of just two states who embraced the ACA. The number of people who have been able to purchase insurance as a result of the ACA is much higher than we’re currently aware of.

Thirdly, you need to look at the trend. A four time multiplier on the number of enrollments from one month to the next is much more telling than the overall number. This is especially true since we’re still four months away from the deadline to buy insurance.

But there is one factor that is more relevant to the success of the ACA than overall enrollment numbers; how many people under the age of 30 are signing up? We don’t yet know what that number is on the federal exchange. I don’t believe we’re going to know that number until March or April. But we do know what is happening in Kentucky. 41% of the people that bought insurance in Kentucky are under 31 years old. That’s a huge percentage that I never saw coming. I suspect (I don’t have the data on any other state yet) that the percentages will be similar in all of the states that elected to take the medicaid expansion, since Kentucky doesn’t have a substantively younger population than any of the other states. I also suspect that the national percentage of under 31s will be lower, absent the medicaid expansion. For the under 30 population in the expansion states, coverage is well under $100 a month. It will be around, or a little bit higher than $100 for those same people who live in states where their governors are trying to undermine Obamacare. It’s reasonable to expect that higher costs will equal lower enrollments. I would be shocked if that 41% were cut in half in the more expensive states. But if we assume that nationally, the under 30 percentage is 20%, we will definitely get the 2.9 million enrollments that we need to keep the current premium levels.

In other words, this reform is most assuredly going to work. None of the early indicators suggest otherwise to me. I must say that I’m pleasantly surprised at how well this is going. I was very skeptical was passed, but I’m always happy to be proven wrong by evidence