Reuters logo
President Obama takes health pitch to California after rate row
June 7, 2013 / 4:01 AM / 4 years ago

President Obama takes health pitch to California after rate row

June 7 (Reuters) - President Barack Obama will tell Americans they are getting a good deal out of healthcare reform during a trip to California on Friday, where an argument is raging over whether it is living up to its name as the Affordable Care Act.

Support for the reform in California, the nation’s most populous state, is seen as crucial to the success of Obama’s signature domestic policy when millions of uninsured Americans are able to choose health plans beginning on Oct. 1.

At issue are prices for the new health plans proposed by insurance companies and made public late last month. Supporters of “Obamacare” said the prices were lower than expected and hailed them as an early sign of success, but opponents quickly took issue and said they would make insurance more expensive than what is currently on the market.

People with incomes well below the poverty level will do well since their coverage will be eligible for government subsidies, said Joseph Antos, a health policy expert with the American Enterprise Institute, a conservative think tank.

“It’s going to be the one’s further up who end up paying. It’s also the taxpayer who is going to end up picking up the cost of the subsidies that are going to be offered nationwide,” he said.

It may take months before Americans can fully gauge the value of the plans they will be offered in October. The premium rates figuring into the California argument are only preliminary, while details - such as how large the network of doctors is in each plan - remain unknown.

With six million uninsured residents, California has been one of the quickest states to develop its own health insurance exchange. Healthcare advocates hope that as many as one million uninsured Californians will sign up for the new plans in the first year and lead other states to do the same.

“Implementation needs momentum and creating momentum in California is a really good move for them. It’s a large market and a positive media market for the President. He’s going to get coverage when he goes to California. And what they need to do right now is amp up the visibility around implementation,” said Dan Mendelson, chief executive of research firm Avalere Health.

Covered California, the California state exchange, said on May 23 that it had given initial approval to 13 different companies to sell plans on the insurance exchange, from big names like Anthem Blue Cross of California, part of WellPoint Inc, to smaller players such as Health Net Inc and Molina Healthcare Inc.

Rates would be from 2 percent above to 29 percent below the 2013 average premium for small employer plans, according to state exchange officials. The cost to a 40-year-old would be between $40 to $300 per month for a mid-level plan, depending on their income level and subsidies.

“Obviously, there is more work to do on affordability. Even in the best of circumstances, health insurance isn’t cheap,” said Anthony Wright, executive director of Health Access California, a statewide consumer advocacy coalition.


Billed as a success by the state and federal governments and health economists that first day, the rates have since come under fire. Healthcare policy expert and Forbes commentator Avik Roy said that prices were in fact going up as much as 146 percent for some people when compared with prices for individual plans for sale now in California.

This “rate shock” argument - that rates would be too high to be affordable - sprung up again. It had been espoused by insurance executives and Republicans, but was quieted earlier last month after low proposed premiums were released by a few other states including Washington, Oregon and Vermont.

Obama is expected to defend this critical piece of his reform - the affordability of insurance on the health insurance exchange in California due to competitions and premiums - during his speech in San Jose, White House spokesman Jay Carney said earlier this week during a briefing.

Enrollment is essential for the success of these insurance exchanges as the government seeks to get millions of Americans to sign up and provide a diverse enough risk pool to make the insurance competitive. The government will pay subsidies to people who earn less than 400 percent of the federal poverty level.

“It’s premature right now for people to be figuring out whether they can afford this,” said Linda Blumberg, health economist at the Urban Institute.

Marketing for the new insurance plans in California and other states running their own exchanges is expected to take off in July. Blumberg hopes that is when information about the benefits of these insurance products will become clearer: that they provide essential benefits like maternity coverage; that they cannot deny customers based on preexisting conditions; and that there is financial assistance.

Those and other changes under the health law, such as men and women paying the same price on the exchange, are some of the reasons why it is difficult to compare California’s announced prices for 2014 with currently available individual plans.

In addition, there are up to four tiers of health exchange products under Obama’s health law, starting with a minimum amount of coverage set by the government and climbing higher.

“The policies are different - generally more comprehensive. They offer better coverage, less out of pocket costs,” said Gerald Kominski, director of the UCLA Center for Health Policy Research.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below