Debating Obamacare: How About Them Apples?

Posted on 04 June 2013

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By Anthony Wright

The white hot spotlight on health reform in California continues. For the New York Times Room For Debate, we at Health Access were pleased to contribute an essay, "Obamacare is Working in California" as part of a package answering the question, "Is Obamacare Too Complicated to Succeed?" Here's part of our answer:

In fact, the law is a huge step toward a simpler and more straightforward system. One of the new insurance exchanges under the ACA, Covered California, will offer standardized plans to finally allow consumers and small businesses to make apples-to-apples comparisons among health plans.

The law will also provide subsidies so low- and moderate-income families can pay only a percentage of their income, on a sliding scale. It's a revolutionary change; premiums now can be based on what you can afford, rather than how sick you are.

Using its purchasing power, Covered California has just announced negotiated rates with a broad selection of plans - and there's good news: the rates are lower than expected. This is partially because California explicitly gave its insurance marketplace the power to bargain for the best price and value.

Read the whole thing to see how we compare the Affordable Care Act to both an iPhone, and a Harry Potter novel.

Photo credit: Ed YourdonCalifornia is getting attention from both sides of the political debate. Some Obamacare opponents are trying to dispute the competitive rates of Covered California. Most notable is Avik Roy at Forbes. He tries to make the case for "rate shock," while totally ignoring both that the value of what people are buying is substantially different, and the impact of subsidies for lower- and middle-income Californians. What's most amazing is that in the middle of decrying apples-to-oranges comparisons, the whole article is based on making apples-to-oranges comparisons.

His Forbes colleague Rick Unger eviscerates his argument, particularly his use of teaser rates on eHealthinsurance - ones that don't take into account health status rate increases or skimpy benefits - as the basis of his comparison.

One of the most thorough rebuttals was Ezra Klein at the Washington Post Wonkblog, who imagines a Best Buy that operated like the current individual market, that advertises a cheap TV, but then may not decide to sell it to you, or can charge you differently depending on a questionnaire. It's actually worse that that: He neglects that the TV may not work on certain days, and may charge you more on certain months after you already bought it. Jonathan Cohn at the New Republic adds on.

Yes, Covered California will be less complicated and confusing than the current individual market. That's not a high bar. The fact that it will offer actual apples-to-apples comparisons and affordability subsidies and the bargaining power only large employers previously had? That's a transformational improvement to a simpler system.

Anthony Wright is Executive Director of Health Access California, a statewide health care consumer advocacy coalition of over 200 groups.

Even if you believe that Covered California is a positive step, you cannot ignore California’s history of taking workable ideas and destroying them bit by bit. When it comes to health insurance issues this can be seen with “Medi-Cal” which has slowly evolved into a complicated unaffordable mess. I think that is a reasonable fear that Covered California will also evolve into a more complicated and unaffordable mess. In fact, given California’s history, it is almost a certainty.