Despite the recent announcement of low premiums for Californians under Obamacare, Sarah Kliff isn’t celebrating yet:
California’s health-care marketplace isn’t like those being set up elsewhere in the country. When California created the country’s first-ever health insurance exchange, way back in November 2010, it made a very significant policy decision. The state decided that it would act as an “active purchaser” that would select a small number of health plans allowed to sell on the California exchange. Health plans would have to do more than meet a set of requirements in the Affordable Care Act. They would need to be selected by the California exchange’s board to compete in the marketplace. …
In an active purchaser exchange, health plans know that they’re competing against others for the chance to access millions of customers with tax subsidies. That could easily effect the bids that they submit, the ones they hope will get them into the new marketplace. That’s the dynamic in California, but not in most other states. That makes it a bit difficult to generalize what the state’s insurance rates say about what will happen elsewhere, where this downward pressure doesn’t exist.
Lanhee Chen, Romney’s former policy director, argues that the California’s rates aren’t as favorable as they first appear:
The only way Covered California’s experts arrive at their conclusion [that individual health insurance premiums in 2014 may be less than they are today] is to compare apples to oranges — that is, comparing next year’s individual premiums to this year’s small employer premiums.
They’re making this particular comparison, they explain, because they believe that the marketplace for individually purchased insurance will look like the marketplace for small employer-purchased insurance next year. For example, the state already requires insurers to issue policies to all comers in the small employer market. Premiums are therefore higher today for small employers than for individuals purchasing coverage on their own.
What this means, however, is that Covered California is creating for itself a very favorable and already higher baseline from which to compare next year’s individual health insurance premiums. That’s how they’re able to create the appearance that Obamacare’s reforms will lower individual premiums.
Meanwhile, Yglesias thinks Obamacare’s Cadillac tax on high-cost healthcare plans is beginning to pay off:
Conservative ACA critics in their scorched earth campaign against Obamacare have been insisting that this, like every promising cost-control measure in the law, is doomed to failure and/or will never be implemented. The story today about actual employer and insurer response to the Cadillac tax indicates that, no, it is beginning to have an impact. Note that this is not the first piece of good news about health care spending aggregates, and that by and large we should expect the press’ understandable and inevitable negativity bias to underestimate Obamacare.
Cohn argues that this is a tax conservatives should support. Previous Dish on California’s low ACA premiums here and here.
The Dish 