How to Make Health Insurance Less Expensive: Stop Requiring More Expensive Plans



For those still scratching their heads, trying to figure out how to produce a health insurance market where premiums are less expensive, it turns out the answer is pretty simple: Allow insurers to sell health plans that are less expensive. Really. That's it. 

Right now, health plans sold through Obamacare's exchanges must meet a variety of standards, including a minimum actuarial value, which tells you the percentage of estimated health costs consumers enrolled in any particular plan can expect to have covered. So a plan with an actuarial value of 80 percent would cover an estimated 80 percent of costs, and a 90 percent value would cover 90 percent, and so on and so forth. 

Currently, Obamacare divides plans into three tiers, Gold, Silver, and Bronze, based on actuarial value, with Bronze of course being the cheapest, lowest-value plans. 

The law requires all Bronze plans in both the individual and small market to maintain an actuarial value of 60 percent. According to an analysis by the health consulting firm Avalere, which has been influential in coverage of Obamacare, adding in something like a "Copper tier" with a minimum value to 50 percent would reduce premiums by almost 18 percent relative to average premiums for Bronze tier plans. 

It would be cheaper for consumers. It would also be cheaper for taxpayers. With the addition of lower-tier plans, the federal government would end up paying out about $5.8 billion less in subsidies over the next 10 years, according to Avalere's estimate. 

Adding a Copper plan to the system is the sort of health-law fix that one might expect to be embraced by some (not all) Democrats over the next few years, because it leaves the law in place while making it cheaper and somewhat less restrictive. That means it could even garner support from Republicans too, depending on the circumstances.

But the real lesson here isn't about the particular savings or the management of the law. It's that restrictive government mandates make health insurance more expensive, and while mandates aren't the only factors that determine premium pricing, if you loosen or remove those mandates, insurance becomes cheaper. It's that simple. 

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  1. From a Risk Management Perspective, what is better than a 300,000,000+ member pool for Health Insurance, Disability, and Pension?

    Whether it is a single MONOPOLY (owned publicly or privately)or the Government, there really should be ONE insurance in which all citizens are a member of. This would be the cheapest and you can guarantee 100% healthcare, disability coverage at a living wage, and a pension at a living wage for everyone.

    1. Because monopolies always give us efficiency and customer satisfaction.

      1. oh wait that never happens. But it will work this time because: TOP MEN.

      2. I’m not talking a monopoly for all goods.

        This is not needed for cereal, watches, furniture, cars, etc. It is needed for these basis needs while one is fortunate to be alive in this world.

        I know that competition works 10000% better monopolies, but in some places, monopolies make sense.

        1. Alice Bowie|8.21.14 @ 12:48PM|#
          “I’m not talking a monopoly for all goods.”

          You’re too stupid to know what you’re posting about. Get lost.

        2. I know that competition works 10000% better monopolies, but in some places, monopolies make sense.

          That sentence doesn’t make sense to anybody here.

        3. I’m not talking a monopoly for all goods.

          Why not? You also need food and shelter in order to survive. Let’s nationalize those as well.

        4. Monopolies that are imposed by government force have absolutely no incentive to do a good job, and as a result they don’t. See Ma Bell for example.

        5. So food, like cereal for example, not a basic need. Health insurance, basic need. Got it.

      3. Because monopolies always give us efficiency and customer satisfaction.

        Sometimes monopolies exist because they give us efficiency and customer satisfaction. See Standard Oil for example.

        1. Or your local DMV.

          1. Or your local DMV.

            Um, no.

            1. US Steel?

            2. My local DMV runs smoothly. They implemented some new processes about 3-4 years ago and the changes dramatically improved service. Not all DMV offices are bad.

        2. The government was never capable of proving that Standard Oil WAS a monopoly.

        3. Standard Oil was never a monopoly.

          1. That’s my point. They were accused of being a monopoly because they had a large market share, but they had the large market share because they provided a superior and consistent product at a low price.

          2. robc|8.21.14 @ 1:21PM|#
            “Standard Oil was never a monopoly.”

            From everything I’ve read, the only non-governmental monopoly was Alcoa. The government broke it up, and prices immediately jumped.
            Good job looking out for the consumer, guys!

            1. Ever heard of A&P?

              As the business journalist Charles Fishman, author of The Wal-Mart Effect, points out, “At its peak, A&P had five times the number of stores Wal-Mart has now (although much smaller ones), and at one point, it owned 80% of the supermarket business.”

              1. Since when did 80% make you a monopoly?

                1. Since when did 80% make you a monopoly?

                  When someone with the ear of politicians couldn’t fairly compete.

            2. DeBeers had a non governmental monopoly in Diamonds for over a hundred years, but even that has been broken in the last decade or so.

        4. Sometimes so-called monopolies exist because they give us efficiency and customer satisfaction. See Standard Oil for example.


          It is questionable that Standard Oil was a monopoly (they still competed with Texaco and Gulf, among others). The monopoly story comes from Ida Tarbell’s account whose father and brother went bust poorly running competing firms.

        5. Standard Oil wasn’t a real monopoly.

          Alcoa on the other hand…

  2. McDonalds had an insurance plan for their burger-flippers that had a $10,000 maximum payout and $1000 deductible. Bring that back and call it the Shit Plan. Let’s get more honesty in government.

    1. Turd stinks!

    2. which obamacare plan has a deductible that low?

    3. Tell us more about how solar is so wonderful because CATS

      1. They’re hard to light.

        1. They are wily, quick and elusive beasts.

    4. And every one of those minimum wage workers was forced at gun point to work there. True story.

  3. My high deductible plan got eliminated by Obamacare. Silly me I was using insurance as, you know, insurance not a pre-paid medical buffet. If you have the resources to cover a 8k deductible why the hell can’t you make that choice? That was one of the stupidest results of the fiasco in my opinion. Obamacare doubled my premium for absolutely nothing.

    1. Same here. I want (and had) a high deductible and 100% coverage over that.

    2. SILENCE, CITIZEN! PAY YOUR “individual shared responsibility payment” AND BE GRATEFUL!

    3. The point of insurance is that everyone pays as little as possible and everyone gets the coverage needed once an incident happens.

      With high deductible, there’s less people paying in, that makes for a smaller pool for insurance.

      I never thought that this was a good idea.
      I mean it is a great Idea for the consumer in which nothing happens. But it doesn’t help the pool.

      1. Alice Bowie|8.21.14 @ 12:52PM|#
        …”I never thought that this was a good idea.”

        You’re a lefty ignoramus. No body cares what you supposedly think.

      2. The point of insurance is that everyone pays as little as possible and everyone gets the coverage needed once an incident happens.

        That completely explains the ACA approach of covering everything down to rubbers and wellness checks.

      3. What the fuck does this mean? The point of insurance is to prevent complete bankruptcy in the case of catastrophic injury.

      4. no one screamed louder than Alice Bowie when the premiums and deductibles were announced. your “thoughts” are all over the place.

        1. I think the ACA SUCKS.

          It’s pretty far off from what liberals want.

          1. Alice Bowie|8.21.14 @ 1:06PM|#
            “I think the ACA SUCKS.”

            Alice, you’re a self admitted troll who shows up to stir the pot.
            You’re also a brain-dead lefty.
            Go away.

          2. Because you want unicorns. Guess what, they don’t exist.

          3. it’s also far from what libertarians want, but we’re not the ones blocking repeal.

            now go suck obamacare’s dick.

      5. Except that, unlike say auto insurance or homeowners insurance where you may never need it, eventually everyone gets sick and needs medical care.

        That’s not insurance, that’s a transfer payment.

        1. It really is a transfer payment.

        2. eventually everyone gets sick and needs medical care.

          Unsupported assertion.

      6. “With high deductible, there’s less people paying in”

        The cost of a deductible doesn’t directly determine the how many people choose to buy insurance. Maybe you’d like to rewrite the stupid point you wanted to make to begin with.

      7. “But it doesn’t help the pool.”

        God forbid we let the insurance company be the judge of that. You know, the people actually taking that risk in the first place.

      8. The point of insurance is that everyone pays as little as possible and everyone gets the coverage needed once an incident happens.

        Wrong, as usual. The point of insurance is to mitigate risk. That’s it.

      9. With high deductible, there’s less people paying in


        How is plan A vs plan B changing the number of people paying in? With a hi D plan, you are paying in, just not paying in for the first $N amount.

        All plans have deductibles, and like with car insurance, some people prefer a higher deductible to get a lower rate.

        1. The objection to high-deductible plans is that the deductible doesn’t go to the socialized pool of transfer payments, but is instead a direct payment for services from the recipient to the provider.

          Can’t have that. Smells too much like a voluntary market transaction.

      10. No. The point is to cover rare, expensive, catastrophic events, and insurance does a good job of providing affordable premiums to cover those things – see home insurance as an example. Lots paying in and few payouts, but the payouts tend to be large.

    4. My high deductible ($2700) plan was also canceled by Obamacare and then I was offered plans with even higher deductibles and much much higher premiums.

      1. Ditto.

        Fortunately, I was able to reup my plan as of Dec 1, 2013, so I still have it for a few more months.

        1. Well, I’m insuranceless now. I mean, there’s no way I’m paying $3000 a year for a plan with a $2500 deductible when I had something similar for $900 a year. There’s no way I’m paying $2000 a year for a plan with a $5000 deductible.

          1. Kulak! Wrecker! RACIST!!!

  4. One problem here is that health care providers know that many patients aren’t going to pay a dime. The only money the provider is going to get is going to be from the insurance company. That’s why so many people had to find new doctors. Because their old ones won’t accept the new crap insurance. Sure, these copper plans may be cheaper, but what’s the point if no doctor will accept them?

    1. Sure, these copper plans may be cheaper

      Cheaper then what? The cheapest plan is twice the cost of my old plan and half as good.

      1. My take home pay has gone down a hundred dollars a week since the Affordable Care Act passed. In addition I’m still paying down hospital bills from a few years ago because the new insurance doesn’t cover jack shit. Sucks all around. This law is costing me more than five thousand dollars a year.

  5. “Loosen the O!care choke chain a bit and we can breathe a bit easier?”

    I’d rather the G butt out entirely. I don’t want heavy fetters or light chains, than you.

  6. The object should be, if anything, to reduce the cost of care, not reduce the cost of insurance.

    Eliminate the middle-men (insurance companies, corporate HR departments, and government) and you automatically remove a huge amount of overhead, and make it a pay-for-service exchange.

    Insurance can be a part of the solution mix but should be completely de-regulated to allow insurance companies to compete for premiums across state lines, and be allowed to set premiums based on the health of the individual.

    1. Simple, yet a completely ignored solution as it eliminates the middle men and the control.

      1. Yup. The insurance companies have lobbyists and make tons of political donations. The government wants control. Match made in hell.

        The people that supposedly benefit are really just fodder for the system – paying to keep insurance companies flush with premiums, and for poorer and poorer quality care.

        1. David Cay Johnston, in one of his books (either Free Lunch or Perfectly Legal), writes that Iowa considered allowing opening up their health insurance markets back in the 1990’s or 2000’s and the state’s largest insurance threatened to cancel all of their Iowa plans, leaving something like ? of Iowans without health insurance. Iowa, naturally, backed down.

    2. And government can handle the handful of folks with chronic conditions that prevent them from obtaining affordable insurance.

  7. For those still scratching their heads, trying to figure out how to produce a health insurance market where premiums are less expensive, it turns out the answer is pretty simple:

    Get the state completely the fuck out of the health insurance market?

    What do I win?

    1. A free, all expenses paid trip to Somalia.

      1. dead babies and crying unicorns sold serarately

        1. Excellent use of my joke…

          1. You can’t *own* a joke, man.

  8. Oh sheesh, next stop Somalia. This time with extra dead babies, and crying unicorns.

  9. with Bronze of course being the cheapest, lowest-value plans.

    They are definitely low in value (almost worthless) but they are far from cheap.

  10. The ACA insurance plan requirements were never about anything other than ratcheting up the forced redistrubtion of wealth between individuals.

    Allowing that to be ratcheted back by allowing cheaper, catastrophic coverage only type plans is antithetical to that real objective and will be fought tooth and nail by the leftists.

  11. if you loosen or remove those mandates

    What, take away some power from the government? But what will they do all day?

    Mandates are the feature the Ds needed to sell the plan to lefty advocacy groups. They won’t abandon that, because it’s for your own good.

  12. I could make a dirt-cheap health insurance plan tomorrow that only covers pharmaceuticals, medical products, and procedures that have been around for at least 20 years.

  13. What’s so terrible about all of us pitching in and yes, a wealth distribution , for basic necessities for all people that need medical care, pensions, and disability coverage ?

    1. Nothing.

      Oh, you meant to ask “what’s so bad about locking people in a cage if they refuse to pitch in”, right?

      1. Don’t allow them to refuse. Collect it in taxes. Right now, we pay taxes. Either allocate from the existing taxes or tax us for this.

        Right now, I pay $950 a month for health insurance for a family of four. In stead of paying that, I can either pay a higher tax or a direct premium (like FICA).

        I don’t view taxes as theft, as you guys put it. I view taxes as a fee for living here. And boy am I glad I live here.

        1. Nice dodge. What happens when you don’t pay your taxes? Oh that’s right, you get locked in a cage.

          1. Everything about bootlicking shitheel leftists is sidestepping, dodging, and question-begging. Federal regulations augured this mess, but somehow nationalizing it under the federal banner will fix everything. Despite the fact that monopolies are always and forever colossal failures with disastrous consequences for all but a few connected individuals. They will ignore the insidious problems already engendered by federal involvement and plead for more.

          2. Yes and you should be treated just like anyone else that stole goods or services.

            That is if you believe in property rights and that taxes are a property of the collective.

            1. It’s not stealing if you are not given a choice.

            2. Jesus Henry Christ. Way to destroy all meaning of the phrase “property rights.”

              1. Doesn’t the collective have a right to it’s property? If someone was to destroy a public bus station, should they not pay to repair it?

                1. The collective only “owns” property in the sense that a mugger owns my wallet.

                  1. That’s hilarious.

                2. Doesn’t the collective have a right to it’s property?

                  Sure, but my property isnt the collective’s property.

                3. “Doesn’t the collective have a right to it’s property?”

                  No. Unless you’re referring to a collective group of people that consented to joint ownership of a property, which you’re not. The “collective” as you refer to it does not have rights to the property of others, otherwise they’re not property rights.

                4. No. Only individuals have rights.

            3. serving in the military is the price you pay for free government healthcare in this country. why didn’t you pay your dues and why is that my problem?

        2. “I view taxes as a fee for living here. ”

          Funny. Cuz I don’t remember signing a contract with the government when I purchased my property or offered services to my employer. If I wanted any of the services that the government currently provides, I would pay for them.

          1. Nobody signs a contract when they are born.

            I know you guys don’t believe in pyramids or think that they are a good idea. But if you look closely, life, itself, is a pyramid scheme. If your mom dies shortly after your birth and there’s no one else there, you die.

            1. More meaningless babble.

            2. Your example doesn’t alter the fact that that that taxes are theft and not fees for services. Otherwise, they would be fees for services.

    2. Funny how the list of basic necessities keeps growing. Judging by what O’Care covers, it’s a hell of a lot more than basic necessities.

      Oh, and might as well insert the standard Bastiat disclaimer here.

      1. My policy now covers pregnancy and abortion. You know, in case I get hit by a bus. Twice.

    3. The fact that it’s FORCED pitching in. That’s what’s wrong with it.

    4. You realize they could already do that if they wanted right?

      If you throw in the government portion of government worker health coverage, government retiree health coverage, The VA, and the various state and local health programs Government spends about 2 trillion a year on health care.

      There are 180 million households in the US with an average of 1.9 people per household meaning that the Feds could just give every household in America a government funded Health Savings Account of $5000 per person then set aside $200 billion to run programs for people with really expensive chronic conditions (aids, cancer, etc.) which can’t be covered by the $5000 per person and they would still be spending less than they were before Obamacare.

  14. Except that, unlike say auto insurance or homeowners insurance where you may never need it, eventually everyone gets sick and needs medical care.

    Exactly the argument made to justify the individual mandate.

  15. How about instead of reducing the actuarial value, you have a plan that doesn’t cover certain stuff? Such as mental healthcare, pediatric dental care, maternity, and substance abuse treatment.

    Allow people to buy a plan that only covers basic medical care, emergency room treatment and lab tests. If they want to go see a therapist that’s going to be on their own dime.

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