The Associated Press has been an important voice in the health care debate. So it was disappointing to see its latest story: “HealthCare 101: A consumer primer on Obama’s bill.” There was nothing wrong with the premise of the piece, which tried to show how different stakeholders would fare under reform. In fact, for months we have been urging news outlets to do just that. But the story seriously skimped on the details. This was one time where brief was not better.
The AP tackled the immediate changes the new law would bring—for one thing, sick uninsured people could join state high risk pools, which the feds are pumping up with a $5 billion cash infusion. It called that solution a “workable alternative,” and asserted—without attribution—that premiums “should be much lower than what’s charged by private insurers willing to take those in poor health.” Where did it ever get that idea? We’ve been told ad nauseum that insurers didn’t take sick people. What’s more, risk pool coverage is no bargain. What’s the evidence that the pool policies (which are among the highest priced in the universe) will be cheaper? The whole discussion left me scratching my head.
A workable alternative? Don’t AP editors check their own clip files? Last fall, it moved a story that claimed the stopgap solution was practically unworkable. It talked about a six-month waiting period before benefits begin. That obviously doesn’t help those who need coverage now. And that same story raised the issue of whether the $5 billion was sufficient for all those needing help now. It noted that “people eligible for government benefits often fail to sign up. And if only one-third were to enroll, the budget could work.” In other words, as Campaign Desk pointed out, the government may be hoping that the other two-thirds would engage in some self-rationing to make its puny allocation stretch further.
In an early January report, Richard Foster, Medicare’s chief actuary, predicted that some 15 million people would gain coverage this year, costing around $4 billion—but that the fund would be exhausted in 2011. How’s that for a definition of “workable”?
Nor did the AP totally level with readers about how much coverage will cost them, even when the tax credits kick in to help them pay for premiums—the sine qua non of the bill. That gets to the crux of whether those with middling incomes will be able to afford the policies the government will require them to buy. The AP correctly reported that the subsidies “would be generous for lower-income families, less so for those solidly in the middle class.” And it showed by example that a family making $66,000 would have to spend $6,257 for premiums—nearly ten percent of its income. Subsidies would cover the rest.
But the AP story didn’t talk about other out-of-pocket costs. A look at the numbers put out by the White House a few weeks ago shows that this family would be on the hook for 30 percent of their health care expenses, since insurance would cover only 70 percent. An official at one of the state insurance departments told me that his state’s largest carrier, Blue Cross, was designing policies with deductibles around $3200. That means this family would have to pay about $9500 before the policy pays a dime—a wad of money, even with the government’s help.
Then there was the AP’s assertion that once the exchanges, or shopping services, were operative in 2014, “insurers will not be able to turn away people with medical problems or charge them more.” We need much more explanation, please! True enough, insurance companies could no longer turn down people with health conditions, costly or otherwise, and they can’t explicitly charge them more because they are sick. But they can certainly charge them more money. The bill allows something called age rating—that’s wonk talk for making older people pay more money. Age, in other words, becomes a proxy for health. Older people generally have more health problems.
The Senate bill, the only game in town right now, allows companies to charge an older person three times more than someone younger. For instance, those between the ages of thirty-five and forty might pay a rock bottom rate. But someone between ages fifty and fifty-five could pay a premium that’s three times higher. This has been an issue in Massachusetts, where older people are charged twice as much, resulting in premiums several hundred dollars more than what younger people pay. Many can’t afford their coverage.
Oh, well. Facts and reality mean little in the congressional arm twisting that’s going on at the moment. But they should mean something to the Associated Press.