Read till the 8th Paragraph in the Times Article, Titled “Health Plan Cost for New Yorkers Set to Fall 50%.”

July 17th, 2013

Wow, what an awesome headline. Then we get the 8th paragraph:

The new premium rates do not affect a majority of New Yorkers, who receive insurance through their employers, only those who must purchase it on their own. Because the cost of individual coverage has soared, only 17,000 New Yorkers currently buy insurance on their own. About 2.6 million are uninsured in New York State.

We are talking about a rate drop for 17,000 people. In NYC, that is a drop in the bucket. The article says nothing about the millions who have insurance through employers. This inconvenient truth is teased at in the first paragraph–when my spider senses started tingling–as people who receive insurance from their employers would not buy insurance from the exchange.

Individuals buying health insurance on their own will see their premiums tumble next year in New York State as changes under thefederal health care law take effect, Gov. Andrew M. Cuomo announced on Wednesday.

This meme will be similar to the results from California. The exchanges will reduce the cost of insurance for those who bought their own insurance, or had some sort of extenuating circumstances that resulted in unusually high prices–the vast, vast minority of people–while the rates of just about everyone else will go up. The Times doesn’t even allude to how rates will be affected for all of the other New Yorkers.

It is difficult to assess whether the ACA is actually making health care more affordable. In the next few months, we will likely continue to see success stories, where those who in the past paid inordinately high amounts for insurance will see their rates drop, while those who paid lower amounts will see their premiums rise. The ACA, at its heart, is a form of redistribution. Calling it a free-market reform was never accurate. It aims to reduce the cost of insurance for a small number of Americans with special circumstances, but at the same time, raising rates for just about everyone else through the mandate/penalty. Some may see this as a victory, as a form of equalizing the market. This may be true. But this was not how the law was sold. Messages from the White House that rates would not go up, and we could keep whatever plans we had, are laughable. Further, the now-evident perverse incentives of the ACA to effect this redistribution–including forcing employers to drop employees to part-time coverage, or employers dropping coverage and pushing employees onto the exchanges (it’s cheaper for them)–will have unseen consequences far beyond insurance premiums. This fatal conceit will no doubt continue to rear its ugly head in many future circumstances.