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Home Publications Blogs Beat the Press NYT Is Badly Confused on Obamacare, Mistakes Mid-Price Plan for Low-Price Plan

NYT Is Badly Confused on Obamacare, Mistakes Mid-Price Plan for Low-Price Plan

Wednesday, 25 September 2013 05:28

Obamacare may be more confusing than many people realized. Apparently even the NYT is unable to get it straight.

In an article that detailed the cost of the plans in the exchange for various types of families in each of the 50 states, the NYT told readers:

"The figures, almost by definition, provide a favorable view of costs, highlighting the least expensive coverage in each state."

This is clearly not true. The numbers featured in the article were for the second lowest cost silver plan in the exchanges. Silver plans are supposed to cover approximately 70 percent of patients' medical expenses. By definition they would be expected to cost more than bronze plans, which target 60 percent of patients' health care expenses. The silver plans by definition are not the least expensive coverage in the state. (To get a bit technical, the second lowest cost plan is also more expensive than the lowest cost plan.)

The numbers featured in the article (which apparently are being highlighted by the Obama administration) are likely to be typical of the costs that patients will see. As the article notes, there are variations within states and people will have an option to find both higher and lower cost plans, but these numbers are not obviously skewed to either the high or low side.

Comments (8)Add Comment
What Capitalism is Coming to in America, the Socialism of Competition
written by Last Mover, September 25, 2013 6:55

Dean Baker should give the NYTs a break. Like the GOP, the insurers and providers, this is new territory for them. People actually comparing prices at a given quality and making choices. Who knew?

Where will it end? How long before free choices made by individual consumers among competing alternatives in free markets will bring America to its government entitled knees? Next week? Next month? Next year?

And after that as Ted Cruz says, it will be too late America. Once free market competition takes hold and begins to undermine the stranglehold of monopoly power on health care, Americans will be addicted to it like the health care druggies they really are, taking and taking and taking from the real makers in America, the monopoly kings of health care.

Wake up America. Free market competition is bad for your health. Chasing free lunches not only makes you a greedy, complacent consumer of something that is not yours, it makes you obese and drives up cost for everyone else as well.

Repent and return to the know-all do-all monopoly kings, where no choices are required because only one choice is available, no price comparisons necessary because only one price is available, where it's one stop shopping because it's the only shop in town.
written by skeptonomist, September 25, 2013 8:41
The Times is clear initially on what numbers it is giving: "For a benchmark plan — the second-lowest-cost “silver plan,” covering 70 percent of projected medical costs for a typical consumer...". So it says later that it is the "least expensive" - big deal. The Times should probably be held to a higher nit-picking standard than Dean Baker, but you can't expect perfection in a daily paper.

More importantly, these numbers are initial guesses which may be off by a lot. The penalty for not signing up the first year is trivial, increasing over a few years, so it is hard to predict actual participation level. I strongly suspect that insurance companies are low-balling, expecting to take a loss initially to get market share, then increasing prices later. They will really want to get the young, healthy people signed up. Several other things are up in the air as well, so any numbers that are given now are not very reliable, but the low numbers do indicate that insurance companies, in contrast with Republican politicians, are committed and actually competing with each other.
Catastrophic Plans are the Cheapest
written by Robert Salzberg, September 25, 2013 9:09
The HHS report also listed prices for catastrophic plans which were the cheapest of all choices that qualify for subsidies. So the Silver plan is the middle plan with Gold and Platinum above and Bronze and catastrophic below.

written by AlanInAZ, September 25, 2013 10:16
The NYT graphic does state the costs are for the second lowest cost silver policy. Have they corrected the "error"?

I am more interested in the large variation state to state for the unsubsidized cost. The large variation implies a large variation in the subsidies state to state because the subsidized costs are equal among the states.
Bad and confusing editorializing at NYT
written by Robert Salzberg, September 25, 2013 1:16
The NYT line:
"The figures, almost by definition, provide a favorable view of costs, highlighting the least expensive coverage in each state."

This line is just bad editorializing as serves no useful purpose in the article.

From the abstract of the report: "This report focuses on the plans with the lowest premiums in each state, as consumers are expected to shop for low-cost plans."

People can always choose to pay more on the insurance exchanges but to encourage people to shop for the plans at all it certainly makes sense for HHS to highlight the lower cost plans. (Which is not the same as the "least expensive".)

written by AlanInAZ, September 25, 2013 2:14
I guess I was also "badly confused" in my prior comment about the nature of Dean Baker's criticism since he was referring to one sentence in the body of the article that said least expensive rather than second cheapest.

More important than that one sentence, at least to me, is the extreme disparity in subsidies from state to state. As a resident of AZ I find it disturbing that a family of four with income of $50,000 receives only a $318 monthly subsidy whereas residents of every other state (except TN) receive significantly more subsidy, with WY winning the jackpot of $955/mo subsidy. This doesn't strike me as very equitable. (Note - my figures are based on the premiums displayed in the NYT graphic.)

Have I made an error in interpretation of the chart?
NYT article has 2 paragraphs of seriously bad editorializing
written by Robert Salzberg, September 25, 2013 2:31
From NYT:

"However, the data provided only a partial picture of the reality that consumers will face. The government did not identify the insurance companies offering policies in the federal marketplaces, also known as exchanges. Nor did it provide any information about the many policies that will cost more than the amounts cited in its report. Such information will not be available until the exchanges open, federal health officials said. Republicans and other critics of the health program were likely to take issue with the financial picture painted by the administration as the new premium information became more widely known.

The figures, almost by definition, provide a favorable view of costs, highlighting the least expensive coverage in each state."

It's jaw dropping that the NYT is criticizing HHS for not providing information that is not yet available. Worse, the info will be available to everyone next week when the exchanges open. What's the rush?

The confusing line Dr. Baker highlighted seems to be talking about the fact that the HHS report had a bunch of charts comparing the lowest cost and second lowest cost plans within categories like Bronze or Silver. As written you'd never know if they were talking about categories or cost within categories. Are you more confused now?

In addition, the NYT piece saying something is the "least expensive" is misleading because its not the same as "lowest cost" and "second lowest cost" language in the HHS report. Depending on the individual less up front may be more expensive in the end.

So the paper of record took a fairly straight forward HHS report about what people might expect next week and mucked it up pretty good.
The Hill is much better than the NYT on HHS report
written by Robert Salzberg, September 25, 2013 2:53
The Hill highlights the big picture which is that premiums are coming in under previous estimates and that for low cost plans with subsidies, they'll mostly be affordable. Pretty sad when The Hill is better at informing the public than the NYT.


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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.