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Thursday, Oct 02, 2014
Editorials

Be skeptical of administration’s exchange sales job

Published:

Consumers should be wary of the administration’s spin that health insurance premiums will be surprisingly low when the federal online marketplace opens Oct. 1.

There is no question some citizens will benefit, but many others, particularly the young, are likely to experience sticker shock, especially when they attend the details.

Administration officials this week released information about the federally run health care exchanges, which offer policies to individuals who don’t get insurance through work or a government program.

It is all part of the Patient Protection and Affordable Health Care Act, which goes into effect next year. The exchanges will open Tuesday to allow consumers time to shop for policies.

The U.S. Department of Health and Human Services this week reported numbers from the approved insurance plans for 36 states that showed the average premium for a mid-level policy would be $328 a month. The administration emphasized health insurance would cost no more than a car payment.

The Florida figures indicated the costs for the mid-level policy would range from $257 to $328, depending upon where one lived. (Urban areas have more policy options.)

The law also provides various subsidies to aid people with incomes up to four times the federal poverty level.

The HHS findings provided President Obama some nice talking points, particularly with congressional Republicans trying to eliminate the law.

He said: “Essentially they’re saying people will like this thing too much, and then it will be really hard to roll back. What we’re saying is, just look for yourself. Take a look at it, and you will discover that this is a good deal for you.” Americans should follow Obama’s advice and study the exchanges closely. But we’re doubtful that most people will reach the same conclusion as the president.

Details remain sketchy. Those preliminary numbers for the mid-level policies do not address such key concerns as out-of-pocket expenses (the cheaper policies the administration cites require steeper patient co-pays), physician choice and prescription coverage.

You can be sure such matters will be affected.

It is inevitable the young and healthy will face higher costs as the law increases coverage for the sick and elderly.

The law demands all pre-existing conditions be covered and mandates policies include essential health benefits, such as maternity and newborn care and substance abuse treatment services.

Such expansion of coverage, however admirable, will tremendously increase costs.

Another provision requires that premiums for elderly citizens be no more than three times that of the young.

All this means younger individuals and families are likely to confront major cost increases.

Many of the young may decide they would prefer to pay the law’s fine rather than comply with its mandate to buy health insurance. That fine starts at $95 a year and increases to $695 by 2016. This could dramatically affect the financing of a plan that depends on the young and healthy helping to pay for the expense of adding individuals likely to need care to the risk pool.

Private firms are coming up with their own health insurance exchanges, and Americans should consider them as they investigate the exchange policies.

Some people, unquestionably, will benefit. Individuals who want to retire before they are eligible for Medicare will likely have better health insurance options. Those who have been refused coverage because of illnesses will be provided relief.

But average Americans probably will be hit with health insurance premiums that are far heftier than a car payment. They need to be skeptical about the administration’s claims, and exacting when reviewing exchange offerings that many may find to be budget busters.

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