Saturday, August 24, 2013

37 Days

Yes, 37 days until launch. Obamacare Exchanges will open on October 1. Supporters like Sarah Kliff at Wonkblog are saying things are pretty much on track. Opponents like Yuval Levin at The Weekly Standard are predicting disaster (Levin's article this morning is titled "Going, Going, Gone"). Which will it be? Readers will know that I am forecasting success; but I wanted to highlight Levin's article as a very articulate example of those who truly believe the ACA cannot and will not work.

Levins argument in summary:

The young and healthy 18-35 year old contingent will not buy in, and if they don't, the program will fail. Premiums will rise significantly for this group, even after considering subsidies. They don't want or need the full range of Essential Benefits that the ACA requires insurers to provide and that the law mandates that they buy. They want and need only Catastrophic Coverage, which the ACA makes it very hard to get (only offered to those under 30 who have no affordable health option - i.e., exchange coverage costs more than 8% of income). In short, the ACA mandates insurance they don't want, or need, and raises its price (even after subsidies) compared to what they would pay pre-ACA. It won't work. Obamacare is doomed.

Read the article. It's very well written. And it's wrong. Take a look at Thursday's post just below this one for a detailed reason why the 18-35s' will buy. Here's the summary:

Levin and conservatives assume 18-35s' (those without employer-based insurance) don't have insurance currently because they don't want it or need it. That's not true. They don't have it in most cases because they cannot afford it, their employer doesn't offer it, or they have been refused coverage. Only 17% (22% of men and 11% of women) say they choose not to have it:

What kind of insurance did these people want that they couldn't afford? Bare-bones catastrophic coverage or full Essential Benefits coverage - the kind ACA will require? Stripped down, catastrophic plans for 28 year olds start at about $60/month, per a just-completed price check on Full coverage starts about $165/month (20% coinsurance, $20 per office visit, $2500 deductible). Which do young people want? Judging from the following, I would say they want the full Essential Benefits coverage:

I believe young people want full coverage and right now they can't afford it. I am confident that when the price comes down to $100 per month or less, 18-35s' will be buyers. Yes, there is a segment of this age group that doesn't want insurance. But most do, I believe. And they want the Essential Benefits package ACA will provide. And after subsidies, most of them will not pay more than $100 per month.

The "young invincibles" will be buyers. Obamacare will work. We'll have proof beginning in 37 days.

No comments:

Post a Comment