OBAMACARE AUGUST 12, 2013
President Obama got pretty worked up about his health care law during Friday’s press conference. And it's not surprising. Republicans have tried to undermine the law, whether by spreading disinformation or interfering with efforts to educate people about their new insurance options. Some have even suggested shutting down the government in order to take away the program’s funds. “I think the really interesting question is why it is that my friends in the other party have made the idea of preventing people from getting health care their holy grail, their number one priority,” Obama said, adding later, “At least they used to say, well, we’re going to replace it with something better. There’s not even a pretense now that they’re going to replace it with something better.”
He's right. But Obama also sounded one false note on Friday. It happened when he was describing what would happen on October 1, when new insurance policies will become available to people who don’t have access to coverage through their employers.
Here's what Obama said:
they're going to be able to go on a website or call up a call center and sign up for affordable quality health insurance at a significantly cheaper rate than what they can get right now on the individual market. And if even with lower premiums they still can't afford it, we're going to be able to provide them with a tax credit to help them buy it. [emphasis mine]
As readers of this space know, Obamacare will unleash several changes on this part of the insurance market. Some, like regulations requiring insurers to cover “essential” benefits, will tend to make insurance more expensive. Others, like tax credits for people with incomes of less than four times the poverty line, will tend to make insurance less expensive.
The effects will vary enormously depending on who you are, what policy you choose, and where you live. And while some people will pay less than they pay today, some will pay more. They will primarily be young, healthy men who benefited from preferential pricing in the past, were content with coverage that had huge gaps, and are too wealthy to qualify for the law’s tax credits—which are substantial but phase out at higher incomes. Exactly how many people fall into this category remains the subject of controversy. But the experts I trust most think that a minority of people getting coverage through the exchanges will end up paying more than they are for coverage now. (That's not including the many people who have no insurance at all right now.)
I happen to think even those people who end up paying more will still get a good deal, although Obamacare critics (like Avik Roy) would disagree. The insurance won’t be expensive relative to what people working for employers get. It will only be expensive relative to what these people are paying now—i.e., for less comprehensive, less available coverage. For that reason, among others, it’s possible to argue that coverage under Obamacare will be cheaper than equivalent coverage is today. I suspect the White House would say Obama’s statement—that people “can” get cheaper coverage than they could before—is consistent with that principle. That's true.
But somebody listening to Obama’s press conference probably wouldn’t grasp that distinction. They’d come away thinking their insurance will be cheaper next year. For some, it won't be. Obama isn’t doing himself, or the law, any favors by fostering a false expectation.
If you're a young, single person in your twenties and you're already insured, your rates may go up somewhat because you're going to go into a big pool with middle-aged people and older people, and we want to enable people to keep their insurance even when someone in their family gets sick. But I think that's fair because when the young get older they will benefit from it, first, and secondly, even those who pay a little more today will benefit 4, 5, 6, 7 years from now by our bringing health care costs closer to inflation.
That's the kind of grown-up, honest talk on which Obama has always prided himself. This would be a good occasion for it.
Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn