Thursday, October 31, 2013

Millions of people are losing their health insurance - NOT!

Of course this isn't true.      

The spin is that many people are receiving cancellation notices because of the Affordable Care Act (Obamacare).  Some of those people are being offered much more expensive policies, and people are again blaming the Affordable Care Act (Obamacare) for the fact that they think they will have to pay more for health insurance-- whether or not they actually will have to pay more for health insurance.  The misinformation is amazing and preposterous.

Are there some people who will have to pay more for health insurance?  Unfortunately, yes, some people may get stuck paying more for health insurance, but most of those people will be getting better plans.  These are generally people who had bad policies to begin with.  Also, some people who are older and have an income that is too high for them to qualify for tax credits may have to pay more.  Some younger people might also have to pay a bit more for health insurance.  

Here's a story from NBC Nightly News that has hit the Internet today.  Paul Waldman at The American Prospect at presented the tale of a woman's woe along with a solid rebut. I've been digging through this all day, and I have a bit more to add to the whole picture.

The story is of a middle-aged woman, a real estate agent, living in the Los Angeles area. There are plenty of things we don't know about this woman.  We don't know her age, which makes a big difference, and we don't know her income, so we don't know if she will qualify for tax credits.

(Postscript:  See the update at the end of this story.  More information about this woman and her situation has been published by the LA Times. 11/1/2013)

Here's how Mr. Waldman at The American Prospect frames the situation:

First he calls the kind of story about ObamaCares as "exemplar" story.  His article is as much about the way the Affordable Care Act is being reported as it is about the actual plans available under ACA.  Check out the link to get a better understanding of this.  He continues:

To see how misleading some of these exemplar stories can be, let's take this piece from last night's NBC Nightly News, which uses an exemplar named Deborah Cavallaro, a self-employed realtor from Los Angeles who buys insurance on the individual market: 
We learn in this story that her insurer is cancelling her current plan, which costs $293 a month, because it doesn't comply with the new law. They've offered her a new plan at $484 a month. That sounds like it sucks! But here are some things the story never tells us. 
First, what exactly was her old plan? Deborah looks to be around 45. If she bought a plan on the individual market for $293 a month, I can guarantee you it barely deserved to be called insurance at all (I've bought insurance like this on the individual market). It probably had a deductible in the thousands of dollars and had substantial cost-sharing for any significant medical event. But the story doesn't tell us what sort of insurance she has.

Mr. Waldman goes on to describe the kinds of insurance that she might have and the kind of insurance that she might be able to get on the California exchange.

Well, he's right and he's wrong.  

One of the people replying to Mr. Waldman's article, someone using the user ID jvanleuvan, believes that he has found more information about the plan that Ms. Cavallaro had.  He spent quite a bit of time trying to prove that the policies offered under the Affordable Care Act (Obamacare) are worse than her old plan.

Well, he's wrong... the numbers that he publishes actually SUPPORT the premise of the article.. but he does make a few correct points.  The truth of the situation and the validity of Mr. Waldman's response or the replies of jvanleuvan depend on Ms. Caravallo's age.. and we don't know what that is.

Aha!  At least we know what kind of policy she had!

I watched the segment on Chris Hayes' show at MSNBC.. If you stop the TV, you can see exactly what kind of policy she had that was cancelled.  Both Mr. Waldman and jvanleuvan were off in their assumptions.

Here's my reply to jvan found in the comments at

I looked up these numbers also, both at Kaiser and at the Covered California site. I also looked very carefully at the clip from NBC. You (and I before I looked carefully at the clip) assumed that the woman might be on something like Kaiser permanante's plan. But no, she was on a Anthem Blue Cross Clearprotection 5000 plan. Here are some of the details of that plan: Deductible: $5,000. 40% coinsurance. Out of pocket limit $8,500. It does include a reasonable prescription drug plan as long as the person is on "regular" medications. It is considered an "A" rated plan. There are more details available online, along with the statement that this plan is no longer available as of January 2014. 

It's very much like a bronze ObamaCare plan except that the out-of-pocket limit is lower in the ObamaCare plan.  Of course, health insurance policies have always gone up every year, so we have no idea how much her premium would have increased if her old plan were still available. 

First of all, all of the numbers that you are posting about ObamaCare plans assume NO tax credit.. Therefore, we would assume that this single woman, getting insurance for herself and herself only, makes at least $46,000 a year. The reality is that many, perhaps most, single women who need health insurance (who don't have employer-provided health insurance) make less, probably a lot less, than 46K a year.  They would then be eligible for a tax credit. 

We don't know her health situation.. We can assume that her health is good enough for her to be insured at a reasonable rate NOW. If she experienced a health problem under the old pre-Affordable Care Act system, she could be dropped. Then all of this nit-picking about which plan is better would be meaningless as the poor woman wouldn't have any health insurance at all... or she would be trying to decide if she could really afford a thousand dollars or more a month.. or if she should risk going without any health insurance. You don't mention that, and, believe me, when you start to get into your 40's, every year brings with it more of a chance of something that will turn into a "pre-existing condition". 

Now... This woman, middle aged, higher income, good health, had a plan with a $5,000 deductible and an out-of-pocket limit of $8,500 that cost her $293 a month. She doesn't want to pay $494 a month. And the Republicans and other naysayers are making it seem as if that is her only choice. But you, jvan, as well as Mr. Waldman, the author of this article, have shown us that, if she is indeed only 45 or 50 years old, she has plenty of choices, almost all of them much less than the "new" policy she was offered at $494 a month. 

Let's look at plans under ObamaCares (Covered California in this case) that cost about $300/month, which is about what she was paying. First of all, there is a big jump in premiums between people who are 45 and people who are 55. We really don't know how old she is, and I personally think she is a bit older than the 45 years of age that the author of this article estimated. If she is 45, all of the bronze plans are better than what she now has in terms of deductible and annual payouts, and none of them exceed $277 a month. Additionally, five silver plans have a premium less than $328/month and are better in terms of copayments and deductibles. Also, two gold plans are less than $325 a month. 

Unfortunately, if she is older, her premiums will be higher... If she is in her 60's, she will only find plans, including bronze plans, that have premiums in the $400's. That bronze plan, however, also has a deductible of 5000K, but a lower annual out-of-pocket limit of $6350 than her current plan. Of course, she can't be dumped from her insurance if she, like so many people in their 60's, develops some kind of health condition. People in their mid 50's are going to be paying at least $300/month for bronze plans, and at least $400/month for silver plans. 

So here is the bottom line: If she is in her upper 50's or 60's and making more than $46,000, she will be one of these people who will be paying more, perhaps $100 more a month,  for a similar plan (bronze) to the one she had, but she can't be dropped, which is a big thing when you get into your upper 50's or 60's. If she is only 45 or 50, she has plenty of options, some of them even cheaper than what she was paying. 

Age is the key here, as is her income (in terms of whether or not she is eligible for subsidies)......... and we don't know either of those things.

So what does all of this mean?
  • Unless we know the person's income, age, general health, and details of his or her previous health plan, it's hard to make any real comparisons.  Most of these stories about people losing their health insurance omit these important details.
  • Most of these stories don't even mention the possibility that the aggrieved individual may be eligible for tax credits.  The availability of tax credits can make a huge difference in the price of the various plans.  
  • Yes, some people will wind up paying more.  Some will pay more to get more, and some will pay more and get about the same.   
  • Ultimately this will be a better country if we don't have tens of thousands of people dying of treatable disorders in this country every year.  To me, that really is the bottom line.             

Update:  LA Times reporter Michael Hiltzik dug a little deeper, interviewed Ms. Cavallaro in more depth and found out more Ms. Caravallo and her situation HERE.  Here are the highlights:

  • As I suspected, the woman is 60, not 45. 
  • As mentioned above, her Anthem plan is considered non-conforming under the Obamacare guidelines.  Hiltzik writes: "Her plan also limits her to two doctor visits a year, for which she shoulders a copay of $40 each. After that, she pays the whole cost of subsequent visits.
    This fits the very definition of a nonconforming plan under Obamacare. The deductible and out-of-pocket maximums are too high, the provisions for doctor visits too skimpy. "
  • The woman is entitled to tax credits based on this year's income, and those tax credits will provide about $200/month towards her improved health insurance if she would bother to actually get on the Covered California website and check.  She had not bothered to check her possible options on the Covered California website before she complained to the media.
  • The woman believes that she can go to any doctor under her current plan (though she can only go twice a year) and that will be restricted in her options under an exchange plan.  Hiltzik says that this is not necessarily true.
  • The woman is concerned that she may make more money in 2014 and may no longer qualify for the subsidies.  (All I can say about that one is "Gimme a break".  She should be so lucky.)
  • From the article:  "When she told Channel 4 that "for the first time in my whole life, I will be without insurance," it's hard to understand what she was talking about. (Channel 4 didn't ask.) Better plans than she has now are available for her to purchase today, some of them for less money. "
  • Mike Hiltzik's bottom line:   "The bottom line is that Cavallaro's assertion that "there's nothing affordable about the Affordable Care Act," as she put it Tuesday on NBC Channel 4, is the product of her own misunderstandings, abetted by a passel of uninformed and incurious news reporters."
  • Finally:  "The sad truth is that Cavallaro has been very poorly served by the health insurance industry and the news media. It seems that Anthem didn't adequately explain her options for 2014 when it disclosed that her current plan is being canceled. If her insurance brokers told her what she says they did, they failed her. And the reporters who interviewed her without getting all the facts produced inexcusably shoddy work -- from Maria Bartiromo on down. They not only did her a disservice, but failed the rest of us too." (Emphasis mine).
Thanks, Michael! We need more reporters like you.

Let me repeat a couple of things I mentioned above:

  • A 60 year old woman who earns more than $46K a year may well wind up paying more for her health insurance on the exchanges if she previously had a "catastrophic" limited plan as did Ms. Cavallaro, but the new plan will give her more benefits.  
  • A 60 year old woman, entering a time of her life when she may be hit with more health problems, was taking a big chance with those limiting "catastrophic" plans.  She was betting on continuing to be healthy (I would guess) until she is eligible for Medicare.  
  • If she did get ill, her insurer, Anthem Blue Cross, could have either raised her rates substantially or cancelled her policy altogether.  Then her current Anthem plan would not have helped her in any way.   
My catty addition

This woman is a REAL ESTATE agent?  Does she treat her customers with as little care, as little attention to detail, as she has treated herself in terms of her health insurance?  Does she jump to conclusions and not do necessary research in dealing with her clients?  Or perhaps she is just a right-wing political hack?  All I know is that, if I were living in her area and in the market to sell or buy a home, I'm not sure I'd give my business to Ms. Cavallaro.         


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