The Dodgy New HHS Report on Obamacare Premiums



How much will insurance plans cost on Obamacare's exchanges? This has been a big, and contentious, question since before the law was passed. Late last night, we got some new information: the Department of Health and Human Services released selected details on plan prices for insurance premiums in the federally run exchanges that will operate in the majority of states.

Administration officials are spinning the new numbers as good news for Obamacare. "The prices are affordable," Gary Cohen, a top HHS official, told The Wall Street Journal. The White House is happily declaring that the premiums are "lower than expected." And multiple news reports on the numbers are following suit, running headlines on the "lower than expected" premiums coming under Obamacare.

But "lower than expected" is, of course, not the same as lower than they are currently. That's not the comparison the administration wants to make. "Because of the Affordable Care Act, the health insurance that people will be buying will actually cover them in the case of them getting sick. It doesn't make sense to compare just the number the person was paying, you have to compare the value people are getting," HHS official Cohen told the Journal. Accordingly, there are no comparisons in the report to current premiums. All that lower than expected really means, then, is that premiums won't go up as much as the Congressional Budget Office initially estimated.

It's also worth noting that the HHS report isn't comprehensive. It focuses on two thin slices of the insurance market—lowest cost premiums for 27-year-olds who make $25,000 annually, and four-member families with $50,000 incomes. As Scott Gottlieb of the American Enterprise Institute writes at Forbes, it's a safe bet these two slices weren't picked accidentally; most likely they represent demographics best served by the law.

What about everyone else? As a Politico piece on the release notes, "the report doesn't actually reveal very much about what most people will pay." Instead, it "gives lots of examples of the kinds of people who will get good prices — but everyone else will remain in the dark until at least next Tuesday, when Obamacare is supposed to open its doors."

Nor did the administration want reporters digging too much into the data before writing stories today. "The report was issued to news organizations on Tuesday under a strict embargo, with specific instructions not to share the information with anyone else, like outside health insurance experts who might be able to provide more analysis of the numbers," Politico reports. 

The report leaked out anyway, but the embargo guidelines suggest that HHS was wary of early scrutiny of the numbers. And along with the selective reporting, it does make one wonder whether HHS is anxious about premium levels when enrollment begins next week. If a comprehensive report on premiums could stand up to outside scrutiny, wouldn't HHS be putting out a fuller picture, and courting outside analysis?

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  1. Kathleen Sebaceous is the epicenter of an F-5 douchenado.

  2. I’ve been waiting for this since hearing the great news that “many” premiums would be lower on NPR this morning.

    Now to RTFA.

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  3. But “lower than expected” is, of course, not the same as lower than they are currently.

    As your dear wife would mention, Mr. Suderman, all Administrations do this on deficits. The Bush Administration regularly had deficits “lower than expected” as their mid-term estimates were always much more pessimistic than reality.

    1. And then they called it a budget cut!

  4. She lied. She lied to us!

  5. “It doesn’t matter that they can’t buy bread anymore, look at this great value they’re getting on cake that they can buy and eat instead,” said Gary Cohen.

  6. Because of the Affordable Care Act, the health insurance that people will be buying will actually cover them in the case of them getting sick.

    1. Pretty much speaks for itself, eh?

    2. In the dark days before the Affordable Care Act, all health insurance would get you was a bonesaw and a used bandaid. And that was for gonorrhea!

      1. When your your parent ended up in the hospital with a broken hip, the heartless bureaucrats at the insurance companies would actually charge you for the cremation fees.

    3. Effing HTML.

      Insert snark of your choice about how, before OCare, the insurance companies always cancelled your policy as soon as you got a sniffle.

  7. Even if “lower than expected” turns out to be true, that just means they have no fucking idea what they’re doing.

  8. So this report was embargoed. Also the Fed apparently releases its reports to journalists ahead of time so they can write up their articles, but everything is embargoed until the Fed’s official announcement is made.

    Can someone in the know tell me how often the government uses these information embargoes and are they doing so more often recently?

    1. Most transparent administration EVER!

  9. NPR reported that a young man can be expected to pay about double, women about 60% more, but the good news was that younger, healthy people will subsidize older, less healthy people. A concept never before thought of in insurance markets.

    1. When the “greatest generation” has died off, will people get pissed about subsidizing the most unrepentantly self-absorbed, spoiled, and greedy generation of humans ever birthed?

      1. Not if we start building the camps now.

        1. Shovel-ready jobs, yo!

  10. these people have no clue why undersell and overdeliver is a concept, but they don’t deal with customers, yet.

    1. I’d say these people have demonstrated a near-fanatical devotion to customer service. They’ll go to almost any length to keep their customers safe and happy. We just aren’t the customers.

  11. Was the expectation set before or after they got rid of the out-of-pocket caps?

    For a 27 year old in Texas making $25,000, the expense of the bronze care (which only covers 60% of the costs, I wouldn’t be surprised if you couldn’t do better negotiating with the debt collector) is over 6 times the tax/penalty in 2014. It looks like a bad deal.

  12. “The report was issued to news organizations on Tuesday under a strict embargo, with specific instructions not to share the information with anyone else, like outside health insurance experts who might be able to provide more analysis of the numbers,” Politico reports. ”

    Pay no attention to that man behind the curtain!

    I am the great and powerfull OZ!!!!

  13. I heard the headline on NPR this morning and immediately thought that it sounded a lot like spin.

  14. The prices mentioned are pretty fucking bad anyway.

    They’re talking about an average premium of $300 before subsidies.
    Which is like a car payment.

    A healthy low-income 27 year old will be paying at least $87 out of pocket, which is like having an unlimited plan on a smartphone. Not too many poor 27-year olds earning $25,000 a year are likely to own a smartphone or be iwlling to shell out $90/month for a data plan.
    But they are being asked to pay at least that much for health insurance, after subsidies.

    1. Not too many poor 27-year olds earning $25,000 a year are likely to own a smartphone or be iwlling to shell out $90/month for a data plan.

      We don’t know the same poor 27 year olds. It sounds like the ones you know are on their way out of poverty.

      1. Ok, so your 27 year olds will have to give up their smartphone and buy health insurance instead.

        1. I was going to write something about revealed preferences, but then I remembered that as a 27-year-old I derive vastly more use from my phone than I would comprehensive health insurance.

  15. ‘Lower than expected?’
    Yeah, ‘It’s not got much Spam in it!’

  16. Even the pre-rollout spin sounds nervous and desperate. This thing is going to be a clusterfuck.

    1. The straw-grasping among my Facebook friends is laughable.

  17. “in Texas, an average 27-year-old with income of $25,000 could pay $145 per month for the second lowest cost silver plan, $133 for the lowest cost silver plan, and $83 for the lowest cost bronze plan after tax credits.”

    According to ehealthinsurance.com, that same 27-year old female in texas can get plans that cost as little as $75 WITHOUT tax credits. Of course, some have deductibles that are $5,000 or more. I.e. they are actually insurance and not pre-paid health plans.

    1. But, but but…ALL healthcare is a human right. It is a civil rights violation to sell insurance. That money just goes to the korporashuns who want you to die. This is HEALTHCARE FOR ALL!

      1. As a mid-level healthcare provider, my biggest question is to the docs that support this shit. Do you fucking WANT to be salaried hospital employees? Do you WANT your ability to privately practice medicine to be twisted and shit upon by the federal behemoth? Do you have any idea what this going to do to physicians? You are going to become defacto state employees- cuz your $200,000 degree and the skills you worked your asses off to learn belong to the gubmint, right?

        FWIW, I work closely with a huge private practice of MDs who hate this shit and want it dead. But they don’t seem to be the majority. These are guys who work their asses off and do a lot of good for people, many of whom are private payers who come from all over the country. Maybe the MDs who support Obamacare are dickbags who get most of their money from the government anyway. I dunno. But I keep thinking, “Well, it’s physicians who practice medicine. If the people who practice medicine spoke up against this shit, maybe the people who ‘consume’ medicine would follow suit.” But no. Physicians are largely silent, and their patients are going to suffer for it.

        1. …”But no. Physicians are largely silent, and their patients are going to suffer for it.”

          Keep in mind that MDs are NOT necessarily knowledgeable about econ. I’d bet most simply see this as a guarantee of their incomes and, BTW, will make sure all those people they’ve heard about who aren’t getting care will now get it!
          Well, yes they will; they’ll be in the ER just like they always have. If you don’t pay income tax, you can ignore having to buy insurance.

          1. Keep in mind that MDs are NOT necessarily knowledgeable about econ.

            I know. Physicians are mostly smart people, and they still occupy a special place in our collective unconscious. We trust them. But this whole situation breaks my heart. Most docs are smart people. Like most other normal humans, they are concerned with making a living and providing for their families. Where the money comes from isn’t necessarily high on the “What the fuck?” list. The practice I mentioned is fortunate in that they are incredibly specialized and very good at their jobs. They’re gonna be okay, because they are established. But up-and-coming docs mostly have no fucking idea how hard they are about to get screwed.

            I have mentored a lot of wide-eyed green residents. Smart and good people who want to serve others. But they just don’t get it. Many of the ones who choose to specialise are gonna be overwhelmed and end up on contract with a federally-funded hospital conglomerate in some capacity. They’ll get it then, but it will be too late.

            1. I am a physician. It’s complicated. Almost all doctors I know feel this is going to screw us big time. The Obama supporters swallow it with some rationalization. The academic doctors who run our professional groups probably genuinely support it. They lean further left than most doctors and have incentives more aligned with big government control than private doctors I know many doctors who left the AMA after they sold us out.

              In general many doctors just want to practice medicine and be left alone. This narrow view increasingly hurts us. But we are probably screwed by this. Obviously my views are skewed by the fact that I despise this administration and others doctors may be more positive than I imagine but as I said, many of my Obamaphiles think this law is crap for us.

              1. Just wait to the 20% cut to Medicare physician reimbursements finally kick in.

          2. Yes. MDs are smart. They know it, everyone tells them that they are, and they have the test scores to prove it. Unfortunately, their knowledge and skill sets are domain specific, and they think that they aren’t. Too often smart people think that they know what’s best for all of us.

    2. Yeah but does that $75 plan cover post-menopausal treatments and a vasectomy?

      1. Don’t forget birth-control, chiropractic and other “essential” healthcare services…

  18. Haahhaha! The second best part of my day is reading Reason’s articles, however the best part of my day is reading everyones comments and being reminded that there are other people out there that think just like me.

    Godspeed everyone!

  19. The whole point is what will O’care do to the premiums of the 80% of Americans with employer-provided healthcare? How much will they go up, and what will that mean for the employer, the employee, and employment.

    1. It means they’ll all have to quit whatever they’re doing and get a job like the one below, making $77 every hour on the computer. So they can afford to pay for their ObamaCare.

      Next up, Obama will pass a law to insure that all of us have jobs that will enable us to pay for ObamaCare. No matter what.

      In the end, they will outlaw unemployment and poverty both, and the world will be run by benevolent unicorns with their Centrally Planned Horns (which they’ll ram up the ass of all dissidents).

      Long live The Unicorns.

  20. my buddy’s half-sister makes ,$77, every hour on the computer. She has been unemployed for 8 months but last month her income was ,$21889, just working on the computer for a few hours. Check Out Your URL….


    1. Who are you and what the fuck did you do with LardoSardo?

      1. It’s a bot-eat-bot world out there.

      2. I miss WomSom.

  21. Did the Koch brothers pay you by the word or the letter for this piece of crap?
    This “libertarian” rag bought and paid by the biggest corporatists in the country is a joke.
    Do the sheep that this crisp know who pays for it?

    1. Obama is the biggest corporatist in the country, and Obamacare is one of the biggest pieces of corporatism in the history of the world.

      It literally forces people to buy insurance from giant corporations.

  22. Anyway, this report is already going the usual liberal rounds. I’ve run into it several times already (on non-political sites).

    That’s one thing the left beats the right by far – spreading propaganda. Like straight from the WH to word of mouth.

    1. How’s my libertarianism coming along?


      1. How’s my libertarianism coming along?

        For minimal critical thinking you get a: D

        The report says that the first CBO estimate was higher than the current estimate. You’ll note that it doesn’t say that:

        a)the current estimate is significantly higher than the rates for similar polices from last year

        b) the current estimate will be affordable to the currently uninsured

        c) the overall cost of the insurance policies, including out of pocket costs will be affordable to those same uninsured

        c) the cost of the subsidies to Tax Payers will be reasonable.

        Those are the kind of critical questions we expect to see from a libertarian.

        However, you were intelligent enough to ask, that keeps you out of the F range.

        1. It’s better than “fuck off, slaver” so I’ll accept the D

          1. Although I did chime in with a few more things downthread…

    2. That’s one thing the left beats the right by far – spreading propaganda. Like straight from the WH to word of mouth.

      Actually, it’s straight from the WH talking points, to specific reporters (Ezra Klein, etc), to the papers and websites and to the general public.

      When you’ve got members of the “free” press who literally visit the White House for their talking points and then immediately write pro-Administration stories for the biggest media outlets in the country, it’s no longer a “free” press.

      1. Many journalists consider it their moral duty to write stories that “help the oppressed”, or whatever. Which in their minds is synonymous with writing stories that are pro-Democrat and anti-Republican.

  23. Hey! Who care s what the premiums are? They have full access to my wallet and most likely my wealth, ultimately. And this is not insurance. It is healthcare. With no restrictions on previous conditions there is no insurance aspect to this law. Burn your house down, get “insurance” coverage, rebuild your house with my money.
    The FED can start a printing war if things get dicey. . . Oh but in a non-political way of course.
    Does anyone in Washington DC even care how the angry people are out here and how devastating the policies of them will be on the long term economy?

    1. No. Next question?

  24. She does bear a striking resemblance to Diana Moon Glampers.

  25. most low cost plans have high deductibles and co pays but include coverage you may not need or want. when most people need hospitalization not primary care or rx

  26. my best friend’s half-sister makes $63 hourly on the internet. She has been out of work for 10 months but last month her pay was $21312 just working on the internet for a few hours. read this post here


  27. If they can collect your phone and electronic communication records in secret what’s the harm in keeping insurance premiums under wraps…

  28. At least those single 27 year olds can get all the birth control they want, and it will cost them less than expected.

  29. An affordable price does not mean a fair price. I could afford to buy a $20 roll of toilet paper, but…

  30. “But “lower than expected” is, of course, not the same as lower than they are currently.”

    I thought exactly the same thing when I first heard this. Then I went to look up the premium for me, wasn’t available at the HHS website, but I was referred out to the Kaiser calculator. There’s a $2,700/yr surcharge for tobacco use. Doesn’t it make more sense to have an obesity surcharge? There’s more fat people to collect from with more health problems. Once this nightmare really falls into place, I’m sure HHS will be adjusting surcharges to make it “more fair.” Don’t eat 6 vegetables a day? Pay more. BMI out of bounds? Pay a tax. High cholesterol? Pay a tax. Maintenance drugs? Pay a tax.

    1. What would be fair, is a free market in health insurance, where government is not prohibiting what patients and doctors want to do for the patient’s health, and where you aren’t forced, by government, to pay for another person’s medical care.

      Then insurance rates would be based on the actual risks for each individual.

      It would also be more fair, if my contract with my insurance company (where those with pre-existing medical conditions pay more, and those who obtain expensive medical conditions after purchasing insurance don’t and keep lower costs as a result of being responsible) wasn’t be cancelled by Obama and the Democrats.

      I’m sure the medical insurance companies lobbied/spent heavily for that provision, to get out of their contractual obligations, and so they could charge more.

      After all, how much do you think you’d pay for auto insurance if you could by it now, to cover the accident you just had? Why, it’s likely to cost as much as a new car. Insurance rates will skyrocket, because government cannot repeal the laws of economics.

      Like PJ O’Rourke said, “If you think things are expensive now, just wait until government makes it free.”

  31. More lies from the Obama administration. And the lies will soon be revealed.

  32. my best friend’s aunt makes $67 an hour on the laptop. She has been fired from work for 5 months but last month her pay check was $13328 just working on the laptop for a few hours. try here


  33. I dunno why, I have a feeling Obamacare or whatever it is called is a good thing for maximum number of unprivileged people of the USA. I’m not too conversant with the economic situation US is currently in, but this health insurance policy will definitely provide better health facilities for low income economies. Though labor unions are showing their skepticism on this insurance because of the possibility of informalization of the workers, I see a point in that too. All in all, I prefer the US government to go ahead with this unprecedented health care reform so that most people can get better health facilities. However, government must keep the apprehensions of the labor unions too.

    Derick Financial Consultant @TeleTrade http://www.teletrade.eu/

  34. Its not that bad at the end. I thought at first that its going to be worse.

  35. And I have heard that there will be even more changes after the 2016. So will have to see how that will come true.

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