President Obama was caught in a tough position this week when media picked up on reports of consumers receiving cancellation notices of their health insurance, after he had repeatedly promised, “If you like your insurance, you keep it.” If applied to every single American, this statement was undeniably incorrect. But the uproar created by the president’s opponents conceals the fact that the cancelled insurance plans will almost certainly be replaced with better ones, and that the “lie” will negatively impact almost very few consumers, if any.
The controversy arises because some insurance providers have had to cancel policies that the Affordable Care Act (ACA) basically deemed too lousy to exist. Most notably, insurance providers will now have to cover all health expenses over $6,000 a year. (In other words, if an insured person gets sick, they will never pay over $6,000 out of pocket in a single year). Previous plans had high deductibles, or caps on benefits that might have seemed high, but due to the inflated costs American health care, could still leave policy holders on the hook for hundreds of thousands of dollars. This was one of the reasons medical bills became the leading cause of bankruptcy in the US, even among the insured.
Ryan Lizza at the New Yorker spoke with MIT professor Jonathan Gruber, who was an architect of the individual mandate in both Romneycare and Obamacare. Gruber broke down the “winners” and “losers” of the law (illustrated above by economist Justin Wolfers). Gruber notes that a whopping 80% of Americans (those who receive insurance through their employers) will be unaffected. Fourteen percent of Americans are uninsured; though they will be mandated to get coverage, they will also have access to affordable plans for the first time.
The remaining six percent buy individual insurance. Gruber estimates that half of this group will have to buy new plans that will be “pretty similar” to what they had before, which he calls “essentially relabeling.” This could be an inconvenience, but won’t materially affect those covered.
The remaining three percent, Gruber admits, will have to pay higher premiums for the improved coverage; in other words, they will not be able to keep their plan, even if they liked it.
But the noise surrounding Obamacare could prevent this minority from realizing some important things: since they were covered by the sub-standard plans, they will benefit immensely from the new coverage should they suffer from even a small medical issue or hospital stay.
Source:
http://live.drjays.com/index.php/2013/11/01/who-really-loses-from-obamas-health-care-lie/