You get what you pay for…

Much more has been written on the new CBO report on whether premiums will go up or down under health reform. I won’t go into all the details, but a few points.

It’s hard to make broad statements about whether premiums go up or down, because so many people are in such different circumstances, and people changes those circumstances frequently. The person getting great coverage heavily subsidized by their employer today may be unemployed tomorrow, paying 100% of a very high premium, if not denied for pre-existing conditions. A young person in the individual market could find his specific policy getting marked up significantly, even if the overall market is not a problem.

That said, it makes some key points: Even without taking into consideration a range of cost saving mechnisms (prevention, payment reforms, etc), premiums will go down for many people, especially low- and moderate-income folks who have the toughest time affording coverage, and who will get subsidies to help pay for coverage.

Even many of those who are not subsidized will have their coverage go down. For those who don’t, it largely because they will be getting better, more comprehensive policies. These are folks who are largely underinsured, who now will be fully insured. So when opponents talk about some who may see an increase in premiums, they are not doing an apples-to-apples comparison. The minimum benefit standards are a feature, not a bug, in that people won’t be suckered into “junk” coverage that leaves them in a lurch when they actually get sick.

For most people, the big takeaway is that for the vast majority of people, they will get a guarantee that health premiums for meaningful coverage won’t be more than a certain percentage of their income. Because we will subsidize low-and-moderate income families based on their income, we will fundamentally change the regressive nature of health insurance. Under health reform, we will move toward a system where we pay premiums based on how much we can afford, rather than how sick we are–which is our current practice.

Health Access California promotes quality, affordable health care for all Californians.

Leave a Comment

%d bloggers like this: