The shocking truth about Obamacare’s rate shock

This is a followup to this previous post, California Obamacare Premiums Lower Than Expected.

Ezra Klein explains The shocking truth about Obamacare’s rate shock

"Last week, California released early information on the rates insurers intend to charge on the new insurance marketplaces — known as ‘exchanges’ — that the state is setting up under Obamacare. They were far lower than anyone expected. Where analysts had anticipated average premiums of $400 to $500, insurers were actually charging $200 to $300. ‘This is a home run for consumers in every region of California,’ crowed Peter Lee, director of the state’s exchanges.

The Affordable Care Act’s critics saw it differently. Avik Roy, a conservative health writer at Forbes, said Lee was being ‘misleading’ and that ‘Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.’ Obamacare, he said, would trigger ‘rate shock,’ the jolt people feel when they see higher rates. That doesn’t sound like a home run at all.

Who’s right? In typical columnist fashion, I’m not going to tell you just yet. But stick with me, and you’ll be able to parse the next year of confused and confusing Obamacare arguments with ease."

"Some people will find the new rules make insurance more expensive. That’s in part because their health insurance was made cheap by turning away sick people. The new rules also won’t allow for as much discrimination based on age or gender. The flip side of that, of course, is that many will suddenly find their health insurance is much cheaper, or they will find that, for the first time, they’re not turned away when they try to buy health insurance.

That’s why the law is expected to insure almost 25 million people in the first decade: It makes health insurance affordable and accessible to millions who couldn’t get it before. To judge it from a baseline that leaves them out — a baseline that asks only what the wealthy and healthy will pay and ignores the benefits to the poor, the sick, the old, and women — well, that is a bit shocking."