The Cost of Obamacare: Health Insurance Premiums Versus Health Care

Now that the Obamacare exchanges are set to roll out, the MSM has been featuring a bunch of articles purporting to compare the cost of premiums under the new system to those under the old one, or to those that were originally predicted for Obamacare.

These latest projections tend to take the form of “it’ll all be so much better!” or “it’ll all be so much worse!” or something in between. A good example of the first type of article is this from CBS, a good example of the second is this from Forbes, and a good example of the third is this from the WaPo.

But the truth is that we don’t really know, and probably cannot know at this point (even if reports were unbiased, which they most assuredly are not). One reason is that comparison of averages is practically meaningless because there has been so much variation in previous plans among states, ages, types of coverage, medical condition of the consumer, and types of insurance. In addition, there will be major differences in premiums between those who will now be subsidized under Obamacare and those who will not.

Still another reason for the confusion is that we do not know how many people will opt out and pay the penalty instead of buying coverage, and how this will affect premium prices. All we do know is that it is highly likely to affect them at some point, and if the number is substantial it should drive the cost up -- whether through increased premiums or increased taxation or in some other way.

But the biggest confusion of all may be between the price of insurance premiums and the actual health care costs for the buyer. Those who pushed Obamacare had reasons for acting as though health insurance was the same as health care itself, and now they have reason to pretend that health insurance premiums are the same as health care costs. But of course they are not.

People who have been buying insurance on the individual market are probably especially aware of this, but anyone who has had to make decisions about health insurance should be quite familiar with it, too. The premiums are just the start of it. The rest involves the probable out-of-pocket costs which is far more difficult to evaluate. What is the deductible under this plan versus that one? What is the medication coverage like? How many times a year does the person tend to go to the doctor, and what would that person be likely to be paying out-of-pocket for those visits? How much freedom would a patient have to choose a doctor, or how limited would he/she be in doing so? How much control would the plan exercise over when a person would be covered for going to a specialist for a problem?