Premiums for New Yorkers to fall 50 percent thanks to ObamaCare!, says the NYT. …Really, though?
posted at 1:21 pm on July 18, 2013 by Erika Johnsen
News stories about rising premium prices for health insurance plans have been erupting all over the country for awhile now, especially on those plans meant for young, healthier, and lower-risk people shopping in the individual market; back in March, HHS Secretary Kathleen Sebelius finally admitted that the increasingly widespread phenomenon of rising premiums is, in fact, at least partially due to ObamaCare, and from coast to coast, that whole “affordable” promise is indeed looking worse and worse.
On Wednesday, however, the New York Times’ big and highly cited story was all about how the wise and magnanimous auspices of the Affordable Care Act are helping to dramatically lower health insurance premiums for New Yorkers, according to figures from the Cuomo administration:
State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower. …
“Health insurance has suddenly become affordable in New York,” said Elisabeth Benjamin, vice president for health initiatives with the Community Service Society of New York. “It’s not bargain-basement prices, but we’re going from Bergdorf’s to Filene’s here.”
“The extraordinary decline in New York’s insurance rates for individual consumers demonstrates the profound promise of the Affordable Care Act,” she added.
Which certainly sounds awesome, except that the state of New York already has a convoluted, bureaucratic, and heavily regulated health care system and has been running some of the highest individual market premiums in the country for about two decades. It’s gotten so bad, there really isn’t much room for their premium prices to go anywhere but down at this point, and the NYT definitely misrepresented ObamaCare’s impact. Avik Roy has their number over at Forbes:
The other approach is to do what Obamacare does: to impose an individual mandate that dragoons the healthy into subsidizing the sick, and to subsidize the cost of the inflated health premiums for some low-income individuals, so at least they can afford coverage. …
As a result, Obamacare does have the effect of lowering premiums in New York, to a weighted average of $301 a month: a 39 percent decrease from 2013 rates, and a 16 percent decrease from 2010 rates. …
It’s always better to see rates go down rather than up, but you have to remember the context. New York’s rates will still be three times higher than those found in California before Obamacare. And the Times inflated the impact of the ACA, implying that average premiums in New York City exceed $1,000 today vs. $308 under Obamacare; by our analysis, using a fairer comparison, the five-borough average for affordable coverage was $695, with a much lower average upstate.
It was a good try, though — goodness knows ObamaCare supporters are certainly on the hunt for some much-needed little victories.