The Dull Knives Come Out
The Dull Knives Come Out As Anti-Obamacare Forces Falsely Attack California Healthcare Exchange Prices (Part I)
6/01/2013 @ 10:24AM
Earlier this week, I posted an article discussing the rather positive developments in the State of California where the prices for purchasing an individual health insurance policy on the newly organized healthcare exchange came in well below what had been anticipated.
As I was certainly not the only writer in the nation reporting this development, I had little doubt that the voices of those who are, in my opinion, more committed to a political and ideological victory than they are to a healthcare system that allows more Americans access to affordable care, would soon be heard from.
It did not take long.
In response to my article—and the positive reaction on the part of Americans who were finally seeing some good news about the Affordable Care Act after years of an onslaught promising everything from death panels to national bankruptcy—my Forbes colleague Avik Roy published a piece, complete with impressive charts and graphs, boasting a headline that trumpeted some very bad news. Contrary to my assertion, Roy’s headline revealed that the California exchange prices were actually raising the cost of an individual policy by 64 to 146 percent.
As you might expect, Avik’s headline grabbed my attention—as did the early paragraph in his article referencing my own piece when suggesting that, “A bit more analysis would have prevented Rick from falling for California’s sleight-of-hand.”
Having both lived in California for over thirty years and having reason to be particularly focused on health insurance issues—including policy costs—I found any allegation that the rates published by Covered California could raise the existing policy prices by as much as 146 percent to be, to say the least, quite shocking. But then, one must always be open to the possibility that something was missed or a mistake was made.
And so, I read on.
What policies, I wondered, had Avik used as his point of comparison in reaching his startling conclusion?
I soon had my answer as Roy revealed where he had acquired his data, writing, “But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the median cost of the five cheapest plans was only $92.”
I must admit that it took a moment to sink in as my first reaction was to laugh. eHealthInsurance.com? Seriously?
Was Avik really using teaser rates published on the Internet by eHealthInsurance.com as his point of comparison? I mean, you don’t have to be a healthcare policy expert to know that websites like eHealthInsurance.com always flash low rates in front of you—prices that maybe one person in a thousand might actually hope to achieve—to tickle the interest of a potential customer.
It’s not that the flashing low prices are necessarily false as there is always going to be someone who can qualify for the exceptionally low rate— although even they will often find that the actual details of what is covered and not covered may be far less beneficial than they might hope. You see, while many of us like to describe ourselves as “never having been sick a day in my life”, the reality is that such individuals are extremely rare. Have you ever suffered a migraine headache? If you have, be prepared for a substantial increase over the teaser price stated on a website like eHealthInsurance.com. Ever experience a summer of hay fever? Your rate will skyrocket as a result. Did you have acne as a teenager? Uh-oh..price is going up.
Indeed, you don’t have to be a think tank scholar to know that the policies listed on Internet websites do not give much in the way of detail when it comes to what is actually included or excluded from the policies being hyped. The only way one can have that information is to actually fill out the application for insurance and await the final quote.
Wanting to be fair, it occurred to me that Avik—as a part of his research—had gone through the process of filling out a lengthy eHealthInsurance.com application, submitting it for consideration and then based his comparisons on the results. Certainly, that would be a credible means of acquiring the comparative rates that rest at the heart of his argument.
However, it seemed highly unlikely that there would have had sufficient time to go through the application process to acquire the data given that Roy’s article was published roughly a week after the California rates were published.
To be certain, I spoke with a representative of eHealthInsurance.com to determine how long the application process typically takes from point of submission to acquisition of a quote. I was told that the process involves a minimum of three weeks (as you will see in some of the reviews of eHealthInsurance. com I provide below, three weeks would be quite an accomplishment as it appears that the more typical length of time from filing the application to receiving a real quote is far longer.)
Thus, it appears clear that Avik simply went to the website, took the lowest five prices listed for policies that appeared to “match” the policies on the California exchange (despite the fact that the important details that really inform what a policy does or does not do are completely absent from the eHealthInsurance.com website) and used this material as his point of comparison.
Still, it is my obligation to give someone who disagrees with me the benefit of the doubt—no matter how difficult such generosity may become in the face of reality. In the pursuit of fairness, I went looking for some “real life” data on just how much the listed prices on eHealthInsurance.com could be trusted. After all, if the body of eHealthInsurance.com customers were finding that the teaser rates held up, this would certainly add credibility to Avik’s thesis.
Last edited by DiabloViejo; 06-02-2013 at 08:18 PM.
There is no stupider creature on earth than a poor Republican. Such a person would stand in line to be sodomized and then thank their assailant afterward.