Empire-building drives dishonest spin from Covered California

June 7, 2013

By Chris Reed

Cato’s Michael Cannon has been a tremendous source of common-sense analysis of Obamacare for years. In a recent commentary on why Covered California would put out such a mendacious and dishonest account of Obamacare’s impact on 2014 insurance rates in the Golden State, Cannon made a point that can’t be made enough. Government bureaucracies have an immense motive to lie. If they don’t, they could die.

“Ever since Obamacare became law, I have been counseling states not to establish the law’s health insurance ‘exchanges,’ in part because … to create an Exchange is to create a taxpayer-funded lobbying group dedicated to fighting repeal. An Exchange’s employees would owe their power and their paychecks to this law. Naturally, they would aid the fight to preserve the law. …

“When it came time to speak to the public, rather than level with the public by using an apples-to-apples comparison, Covered California compared the Obamacare rates to average premiums for small-employer coverage. Why choose small-employer coverage as their basis for comparison? Precisely because small-employer plans already incorporate some of the costs that Obamacare imposes on consumers in the individual market. Small-employer plans already cover more of the additional benefits that Obamacare mandates (#2) and also incorporate a degree of community rating (#3). There’s no reason consumers on the individual market could not purchase those, ahem, “consumer protections” if they valued them. But they don’t, which tells us they don’t value them. So what Covered California’s bogus apples-to-oranges comparison actually tells consumers is, ‘See? Obamacare costs no more than this other expensive coverage you don’t want!’ ….

All of that supports my thesis: officials at Covered California, like those running all the other Obamacare exchanges, owe their power and their paychecks to Obamacare. They will fight to preserve the law, even if they have to deliberately mislead the public.”

Do some reporting? Nah — Sac Bee would rather cheerlead

When will California’s media get around to documenting this mendacity? Don’t hold your breath.

My newspaper editorialized about Cover California’s deceptiveness. Much more typical, alas, was the dumb cheerleading from the Sacramento Bee. It’s just extraordinarily superficial, accepting Covered California’s premise that its insurance will be inexpensive.

“The competition has brought the rates lower than expected – even for so-called ‘young invincibles.’ Some experts have worried that younger people would choose to pay the penalty ($95 or 1 percent of income in 2014, and increasing in later years) rather than buy insurance.

“But with premium prices in line with what employers pay for insurance and federal subsidies for individuals making less than $46,000 a year and families earning below $94,000 – not the excessive rates of the past individual market – that should change. …

“Clearly, insurance plans in California want affordable prices for the under age 34 group, because they tend to be more healthy, offsetting the cost of older, sicker people.”

Lazy and dishonest coverage: The norm for Obamacare

The Bee didn’t even compare Covered California’s rates for the young with the rates they can now get, as journalists for Forbes and other outlets did. Its editorial page just accepted Covered California’s claim the rates were cheap.

This is lazy and dishonest — in keeping with the low standards set during the coverage of Obamacare before it passed.


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  1. SkippingDog
    SkippingDog 7 June, 2013, 08:47

    It has always been both clear and well publicized that insurance rates for the young and affluent would rise with the implementation of the ACA. That is the only group that will be adversely affected at all, and their adversity is clearly minimal. Every other group will be far better off under ACA than they have been up to this time.

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  2. John Stephens
    John Stephens 13 June, 2013, 13:01

    My rates will DEFINITELY be going down with Obamacare. Only the privileged in very well paying jobs get better rates than Obamacare. The real world (85%) of all people will end up paying less out of pocket. The charts published are not taking into account that most people have much worse coverage than that silver plan but are paying the same or more now.

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