There has been much joy and excitement over the recently released report declaring that policies are coming in lower than projected:
The report also gives an overview of pricing and the number of coverage options across the nation. It finds that the average premium nationally for the second lowest cost silver plan will be $328 before tax credits, or 16 percent below projections based off of Congressional Budget Office estimates.
Now, to be sure, had the report come out and reported that the premiums were going to be 16 percent above, HHS would be hammered, so a 16 percent below expectation is positive news. But in truth, this report is only comparing what the policies will cost compared to what people THOUGHT they would cost. It mentions nothing without being able to compare costs to existing costs.
In short, HHS is not saying that people will be paying lower premiums on the exchanges than they’re paying now. HHS is just saying that people will be paying less than HHS thought people would be paying. They’re trying to sell this as good news—people will not have to spend as much as HHS originally thought they would. However, when determining what’s affordable, what really matters is what people think they should be spending.
When we’re trying to figure out if the new premium estimates will be affordable for people, then, we can’t just set a federal standard—which is how the Affordable Care Act defines affordability. We should compare what people (to a large extent, in this case, the uninsured) think they should pay and what HHS says they’ll be paying.
I think that the administration knows that this roll out is going to go very poorly and this report is nothing but an attempt to spin some good news.