Seattle Times Explains Comparing Prices of Exchange Plans

seattle-times-logoOn Friday, front page and above the fold, the Times ran the story headlined “Obamacare: What it will cost here.”

It’s a pretty solid piece of reporting by reporter Carol Ostrom, and by solid I mean she effectively gets the content correct.  That seems a low bar – but it’s not.

The element that caught my attention most was on the question of whether the new health plans offered by the exchange this fall, and announced as having been approved by the OIC last week, are more or less expensive that what you can buy today.

Times on exchange costsComparing existing individual plans and the new plans is difficult. Current plans often limit coverage in ways the new ones can’t, or require consumers to shoulder more of the costs.

So the actuaries in the insurance office took the most popular 2013 plans that were closest to the new ones offered on the exchange, and re-priced them as if they had the same level of coverage. They priced the plans for a 21-year-old, a 40-year-old and a 60-year-old.

In almost all case the old plans, if they had coverage that closely matched the plans approved Thursday, would be much more expensive.

This is hard to hear if you only read the headlines, but it’s very difficult to compare the insurance product world of 2013 with that of 2014.  They are just apples to oranges – and Carol does a good job laying out this content.

What kills me is when folks don’t even try to understand the nuance – which is what we get in Saturday’s Seattle Times.

Danny Westneat’s column (“Obamacare sure seems dull now that it’s here“) reads as if Mr. Westneat simply doesn’t have the time or interest to understand the nuances of pricing these products.

I don’t blame him for that.  It’s complicated stuff.  That said, he gets some of it right.

It’s nearly impossible to do a precise before-and-after comparison because health policies have different deductibles and coverage rates. But you can easily get the gist of what’s happening in Obamacare by looking at ranges.

Example: A family of four, with parents age 40. Currently, if they buy insurance on the open market here, the median price is $858 a month. This is according to the Government Accountability Office, which at the request of Republican senators compiled the “pre-Obamacare” range of health-policy prices in every state.

And after Obamacare? That same family would pay $622 to $1,068, depending on the richness of the benefits, according to the new plans being sold on our state’s insurance exchange. In other words, it’s staying about the same.

Compared to the base of $858 per month, the range he cites is 30% cheaper and 25% more expensive.  That range happens to be the bottom end of the range I believe Jeff Roe was using in that speech he gave last year – but still in the range.

And, in any case, those are real numbers – a 25-30% price differential. That is not at all what I’d call “staying about the same.”

It’s this sort of lackadaisical analysis by folks in the mainstream media that has led to such poor reporting generally on health care – and which has led, in part, to such a broad divide on the topic among the public.

This is complicated, nuanced stuff – I get that.  But, drawing false conclusions to support a hypothesis isn’t the way to go – particularly when the numbers relied upon clearly undermine the point you’re trying to make.

And why Ms. Ostrom should be applauded for correctly getting at a very nuanced point, one over which so much confusion exists.