Minus the Wonk

I'm a huge fan of both FactCheck.org and Politifact.  Both do great, important work.  So I'm pleased to see that FactCheck.org featured an email from me in this week's Mailbag!

Unfortunately, I'm guessing due to space or time constraints, they chose not to publish the full email which included a bit more information and analysis on what I felt was a missing component of their coverage of the healthcare summit.

I've copied my full email below for anyone interested:

Factcheck,

You did a great job covering covering the healthcare summit and I was particularly pleased to see your section "Premium Costs, Up or Down" laying out the facts on the exchange between Obama and Alexander.  I dug into this subject myself, debating with a friend, and found your analysis to be quite accurate.

There was one thing, though, that was missing that I wish you'd taken up.  Obama basically suggested that the reason average premiums go up in the individual market is because people are paying more for more comprehensive insurance.  As you note, this is partially because of the mandate and partially just because if people can suddenly afford better plans, some will opt for them.

You also write:

And as we’ve seen, the bill generally would require more generous coverage than is currently provided, at higher cost. Overall, premiums in the individual market would go up, not down. Some in the nongroup market might choose to keep their current policy, with no changes. The legislation would permit that for a few years.

But I would have loved to have seen you take up what happens to the price tag of a policy in the individual market, comprehensive enough to meet the mandate, if the legislation passes.

In other words, Obama pointed out that people are paying more because, for various reasons, they're getting more.  Hence the story of "average premiums" rising.  But what happens to the price tag on a comprehensive individual policy if the bill is enacted?  If I'm reading this paper (pdf) by Jonathan Gruber (based on CBO #s and analyzing the Senate bill) correctly, that price tag goes down significantly - by about 20%.

But I could be misinterpreting something.  I would love to see you amend your post to include just a couple sentences on this count.

Best,

Walter Frick

As I noted, I could be missing something.  However, Politifact covered this as well, and addressed my concern.  Here they are relying on CBO numbers, as is Gruber in the paper I linked to above:

• Average premiums would be 7 percent to 10 percent lower because of a net reduction in costs to insurers, mostly from the changes in the rules governing the individual market.

• Average premiums would be 7 percent to 10 percent lower because of a shift in the types of people obtaining coverage. Most of that change is tied to an influx of healthier people with below-average spending for health care, who would purchase coverage because of subsidies and a new tax penalty for failing to purchase insurance.

As Politifact notes, this was the basis of Obama's claim that individual premiums would decrease 14 to 20%.

UPDATE: An AP fact check examines the issue.