FOLLOWING mass cancellations of existing health policies by insurers, President Obama has apologized for promising, “If you like your insurance plan, you will keep it. No one will be able to take that away from you.”
He has accordingly modified the rules to allow insurers to extend existing policies another year. But he is still arguing that, “For the fewer than 5 percent of Americans who buy insurance on your own, you will be getting a better deal.”
Washington state Insurance Commissioner Mike Kreidler is essentially using the same argument to block Obama’s temporary fix in this state.
Admittedly, Kreidler has a valid concern that last-minute changes will further disrupt an already shaky start for Obamacare. But Obama’s claim that those with unsubsidized individual policies will get a better deal is false, and we need a long-term fix.
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I am in that 5 percent. Checking the Washington state health-insurance exchange, I found I am among millions who are getting a much worse deal — much higher premiums with higher deductibles and less choice of doctors, and ineligible for the Affordable Care Act tax credit.
My current premium is $278 per month with a $3,500 deductible. My Blue Shield insurer is canceling this policy and not offering any policies on the state health-insurance exchange. The least expensive off-exchange policy it now offers is $545 per month, roughly double what I pay now, with a $5,000 in-network and $10,000 out-of-network deductible.
On the Washington state exchange, the least expensive option, in the bronze category, is $433 per month, a 56 percent increase. But this policy is from a no-name insurer that few of my providers will accept. The only Blue Cross and Blue Shield provider on the exchange offers a bronze policy for $492 per month — a 77 percent increase.
What does the extra $214 per month offer? A lot less than I have now. My deductible would rise to $5,000 for in-network providers and $10,000 for out-of-network providers, and the number of providers in network would decline.
This is a nationwide phenomenon, as insurers limit access to doctors and hospitals on the exchanges. Blue Shield of California, for example, offers only half as many in-network providers on the exchange as it does off the exchange.
In June 2009, Obama said, “If you like your doctor, you will be able to keep your doctor, period.”
That is untrue unless you go out of network and pay “chargemaster” prices, which are typically far above those negotiated with insurers.
U.S. Sen. Joe Manchin, D-W.Va., has it right: “Affordable health care means trying to get more people insurance that had no insurance. Making people who had insurance buy a different product that costs more for less coverage? You can’t go home and defend that.”
Democrats must offer workable fixes. Sens. Mary Landrieu, D-La., and Dianne Feinstein, D-Calif., have sponsored a bill to require insurers to extend existing plans indefinitely. That could buy time to enact longer-term reforms.
One option would be to lower the age for Medicare in order to cover the higher age cohorts hardest hit by premium increases.
Or, since the problem is with individual plans, why not offer open-enrollment group plans on the exchanges with lower premiums and wider networks through better pooling of risk?
These could be sponsored by churches, labor unions and other civic groups, as in Belgium. By being truly nonprofit, they would help lower premiums, unlike the current Blue Cross and Blue Shield insurers that are nonprofit in name only and pay their executives seven-figure salaries.
Another would be to cap chargemaster prices and require disclosure before service. Providers have argued that these prices, which are generally way above actual costs, are needed to recoup losses on care for the uninsured. But that is no longer justifiable as insurance becomes mandatory and subsidized.
Americans lack transparent and competitive pricing for health care. On other purchase decisions, we see and compare prices first. With health care, we sign a blank check before service. Is it any wonder the U.S. has the world’s highest prices for health care?
Andrew Reding, a Bellingham resident, is a senior fellow of the New York-based World Policy Institute.