The flimflam of this week’s Obamacare numbers

September 27, 2013

At midweek, the Department of Health and Human Services released its report on the health plan choices and insurance premiums available under the Affordable Care Act, which opens for enrollment on Oct. 1 in 36 states.

The HHS press release accompanying the report glistened with the positivity of a group hug, starting with its headline, “Significant choice and lower than expected premiums available in the new Health Insurance Marketplace.” The press release’s feel-good theme of “lower than expected premiums” ricocheted up and down many news columns the next day.

“Cost may be under forecasts”; “Obamacare To Cost Less, Feds Say”; “Rates from insurance exchanges lower than projected for most, HHS says”; and “Report: Georgia Obamacare premiums lower than expected”; read the print headlines in the Dallas Morning News, the Herald News of Passaic County, N.J., the Kansas City Business Journal and the Atlanta Business Chronicle.

The upbeat message prevailed in many of the stories about the HHS report, with the Austin American-Statesman reporting that “premiums could be approximately 16 percent lower than originally expected.” (The language in the press release had it only slightly different: “Premiums nationwide will also be around 16 percent lower than originally expected.”) CBS News echoed the report, too, stating, “premiums nationwide are expected to be around 16 percent lower than originally predicted,” as did the Detroit News and other outlets.

If “lower than expected” sounds like a shady retailer’s sales pitch to your ears, you’re on my wavelength. “Expected by whom?” is the first question that comes to the clever shopper’s mind. The HHS press release and some of the news accounts answer this question: The healthcare prices being showcased by HHS were from a government estimate, as was the previous — and higher — set of numbers, which were projected from Congressional Budget Office calculations (pdf). In other words, the only thing that has changed is the government’s best educated guess of what health coverage will cost, state-by-state, in the 36 states where the federal insurance exchanges operate.

The most critical take on the report I encountered was Politico’s, which called the new estimate the administration’s “carefully selected numbers.” Politico maintained, “The report doesn’t actually reveal very much about what most people will pay.” But Politico wasn’t alone. The Associated Press challenged the government’s data analysis, reporting, “To get an idea of the true cost of coverage, consumers have to add up premiums and their expected out-of-pocket costs.” The AP story quoted a spokesman for Senate Republican leader Mitch McConnell (R-Ky.), who pointed out that premiums that are “lower than projected” are not the same as “lower than they are now.”

The Miami Herald had its doubts, too, noting that four insurance plans will be offered by the federal exchange, running from the cheap “bronze” to “silver” and then to “gold” and finally to “platinum,” the most expensive tier. “Premium amounts for platinum plans were not provided” in the report, the Herald reported, indicating that the report cherry-picked the numbers. Halfway into its story, the New York Times allowed that, “The figures, almost by definition, provide a favorable view of costs, highlighting the least expensive coverage in each state.” The Philadelphia Inquirer similarly dinged the HHS report. “The examples released by the administration Tuesday were for people who are younger than average and are likely to pay cheaper rates,” the paper reported, adding, “premiums on the exchanges are likely to be higher in many cases than on the individual market now.” Which renders “lower than expected” into a bit of a joke: Everything is lower than expected if your original expectations are high.

The reporters who filed squishy reports, or led with squish, are only partly to blame. According to Politico, the HHS distributed the report to reporters under embargo — which essentially places blinders over their eyes, plugs in their ears, and socks in their mouths. Politico reported:

The report was issued to news organizations on Tuesday [Sept. 24] under a strict embargo, with specific instructions not to share the information with anyone else, like outside health insurance experts who might be able to provide more analysis of the numbers.

The Richmond Times-Dispatch also cited the meddlesomeness of the embargo, but used a sharp knife rather than a wooden spoon to inflict punishment upon the manipulators at HHS:

The analysis was embargoed for release last night at midnight as part of a public relations run-up to the opening of enrollment in the marketplaces Oct. 1.

Which returns us to the shady retailer metaphor. As scholar Peter Reuter once observed in his timeless essay (pdf), “The (Continued) Vitality of Mythical Numbers,” Washington agencies routinely generate numbers to make it appear that the government knows “a great deal more than it actually does.” When it comes to the reliability of government predictions — especially positive predictions — your expectations can’t be low enough.


You can’t get lower than the expectation I have for emails to My Twitter feed is embargoed until I say otherwise. Sign up for email notifications of new Shafer columns (and other occasional announcements). Subscribe to this RSS feed for new Shafer columns.



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Not much of an evidence-based article. Shouldn’t a journalist, even an cranky editorial pundit, do more than just cherry pick quotes from other journalists and 25 year-old articles? Little light, little substance, reveals more about the writer’s frustration than the “Obamacare numbers”. I suggest more fiber.

Posted by donsmith | Report as abusive

In all the hoopla about how ‘cheap’ the insurance would be I thought about those pesky little things called copays and deductibles and that, for many, who hadn’t been buying any health insurance, every dollar they have to pay for it would be a dollar they couldn’t spend on what they were currently buying.

I’ve got a feeling when people actually have to start sending in their monthly premium checks they won’t find them ‘cheap’ and if they actually have to have any medical treatment they will find the deductibles ruinous.

Posted by sangell | Report as abusive

i noticed the other day that when they show politicians on tv, something appears to be done to sound, to make the person more vigorous or more downcast for example, try watching same speech on different news channels, ever noticed anything like that?

Posted by barenski | Report as abusive

Phony Emboargo?
“The report was issued to news organizations … under a strict embargo, with specific instructions not to share the information with anyone else, like outside health insurance experts who might be able to provide more analysis of the numbers.”

This makes no sense and requires much more explanation. How could the government release information to journalists – reporters to the public – while demanding that it not be shared?

This snide and innuendo-filled article is beneath you, Jack Shafer. It insults nearly everyone including wimpish journalists, the government and the public.

Does anyone know what the actual costs of the Patient Protection and Affordable Care Act (a slight modification of Romneycare and predecessor systems) will be? Of course not! So, what’s the point other than entirely political and meaningless bashing.

BTW, it’s Americare, not Obamacare. Our duly-elected Congress created most of this bill and passed it. So, those who claim to support the Constitution are wrong and don’t seem to understand how our government of the people, by the people and for the people actually works.

Then, we all know that the Plutocracy took over the United States decades ago. The Class War continues, but we all know:
“Let them [the Pee-Ons] eat cake, or better yet, just let them die.”

Posted by ptiffany | Report as abusive

It’s not really Americare, only one party voted for it and they did not read it or share it with America before putting it into law. Sad state of affairs regardless of your political leaning.

Posted by capinfergie | Report as abusive

I’ve talked to 2 ACA agents by phone, who did the Bronze Plan (cheapest) calculations with me. My rates are going up 300%. For an income of $74,000, I am going to be paying 1399 a MONTH – $16,788 a year – plus a $5000 deductible!

Add this kicker – if I got divorced, my rates would drop to $699 a month. Talk about a marriage penalty.

So Obamacare is a DISASTER for my family. Sheer liars.

Posted by hindenburg | Report as abusive

Neither supporters, nor detractors have exclusive rights to disinformation. It is a shame both groups cannot wait for some real results before reporting what hasn’t happened yet

Posted by auger | Report as abusive

If you were paying $318 per month before, assuming a full family, why would you switch to another plan? Also, what state are you in? Is it one of those states that is not participating?
BTW, why were you talking to two ACA agents?

Posted by ptiffany | Report as abusive

Fiddle-faddle. Consarn it.

Posted by MoBioph | Report as abusive

It’s interesting how our political system works. Sometimes it’s one party in the majority and sometimes the other. Does that mean that every bill that’s passed becomes the bill of the majority party?

And, check your facts. Republicans voted for Americare (better named Romneycare) as well. The Supreme Court approved it. It’s the law of the land, just like abortion (for over 40 years).

The hypocrisy in the dispute is amazing. When asked, “Do you favor Obamacare?” The majority (not most) people say “No”. When asked about all of the specifics, they nearly unamimously say “Yes” to every single feature! The media contributes to this mass confusion and generally report on those making the loudest noise and generating the most controversy.

Very rich people oppose the Patient Protection and Affordable Care Act. Ever wondered why? And, why are they spending tens of millions of dollars in advertising to oppose it? Is it because they just like throwing their money away? Or, could they be getting wildly rich off the current unbalanced system of healthcare?

Posted by ptiffany | Report as abusive

I had no idea that the premiums would be as high as they are. It sounds very unaffordable to me. Here in Ontario we pay a percentage of our income every year at tax time but it is a maximum of 750.00. I guess that is the benefit of a single payer system as opposed to the type of monstrosities that get created state-side.

Posted by wyldbill | Report as abusive

The answer to your first question is No, we are a democracy. Where did I go wrong, were the Republicans working and cutting deals with groups and States to get it passed? I wasn’t aware the Republicans voted in the majority for the Bill. Check your facts, in fact read and respond intelligently to comments. Never said none voted for it. If you were able to read it before it was voted on, why did you not share it with the rest of America? Also was the individual mandate a tax or not?

Another point of interest is your comment about the specifics. Do you really think that over 2,000 pages of “specifics” is what the majority of Americans want? We could have handled the insurance/healthcare issues in a 10 point Bill of maybe 10 pages each. I agree we needed change in healthcare, but I also believe that this time next year the majority will have experienced an enlightenment in one way or another. I for one am willing to wait and see. I do not spend my time arguing for or against the ACA. I just believe the healthcare system won’t be the same for most Americans next year. It’s a big gamble. As a point of reference, I am a physician that treats the poorest in America on a daily basis. I see the unemployed and minimum wage earners that are suppose to benefit from the ACA. So far it does not seem to be effective, but it’s early. We’ll see. Keep up the fight,but laugh a little. Maybe you’ll be right. I hope so.

Posted by capinfergie | Report as abusive

If empty, factless prattle makes a great column…THIS is a great column!

Posted by JayMandeville | Report as abusive talked to 2 ACA agents? What is an ACA agent? Insurance companies post their plans and pricing. There is no ACA Agency. If your healthcare insurance is increasing 300%, that would indicate that you are currently paying $466 a month for healthcare insurance (based on the $1399 quote you stated). Why are you shopping for insurance? Doesn’t the $466 plan you currently have satisfy the law for coverage? Your post sounds….fishy!

Posted by xyz2055 | Report as abusive

The rising cost of healthcare has been as issue for decades. It is a significant part of annual federal expenditures. Presidents for decades have tried to get healthcare reform. Therefore doesn’t is seem odd that the Republican’s like Ted Cruz, who states he will do anything possible to defeat the ACA has no plan of his own to address this issue? He thinks that the “status quo” is acceptable?

Posted by xyz2055 | Report as abusive

Mr. Shafer, you seem desperate to bash Obamacare, but you don’t have an argument.

Posted by orangutan | Report as abusive

What bothers me about all the people complaining about how expensive the plans are don’t pay for their insurance out of pocket or pay only a portion of it with the rest paid by their employer !! I pay for my insurance for my family of 4 which is comparable to the silver plan in New York for $3,100 a month. The silver plan on the exchange is $11,590 a year, I will save $25,000 a year by going to the ACA !! Until you pay for your insurance (FULL OUT OF POCKET) don’t preach to me. You have no idea what youyr talking about.

Posted by frikfrak | Report as abusive

I love the complaint about a discount once you are divorced….yeah it is half as much when you pay for half the people… they really screw you there…? DOH

Posted by Benny27 | Report as abusive

It’s ironic that the headline of this hair-splitting, semantically strained presentation of supposed inaccuracies in reporting refers to last week’s numbers as this week’s numbers. (Once upon a time in America, to ensure that their work would stand the test of time, writers, a group that could be charitably understood to include editors, were taught to avoid unqualified temporal references. But, to the extent that a couple of generations qualifies as a long time, as of today, October 1, 2013, that was long ago.)

Posted by MoBioph | Report as abusive

And your point, Mr. Shafer, is…????

Posted by Des3Maisons | Report as abusive

The reality is that there is a problem to fix and that (1) the Affordable Care Act doesn’t fix it while (2) the anti-Affordable Care Act crowd doesn’t appear interested in fixing it.

The problem is that Americans pay 90% more per capita than citizens of the countries with the next-most expensive healthcare on the planet (the Swiss and various Scandinavians). That high price is the result of a broken system, and the money isn’t going to doctors (not directly, anyway). It’s going to various corporate structures that have interposed themselves into the space between doctor and insurance company. There is so much money involved that it is easy to raise funds for politicians who promise to sabotage all efforts at healthcare reform. That’s the reason the Affordable Care Act doesn’t deal directly with the real problem, and it’s the reason the Federal government is shut down today.

That is the only issue in American politics at the moment.

Posted by Bob9999 | Report as abusive

@Frik There are a couple of items that drive your plan costs because you live in NY.

1. You have “special interest” health care groups that have pushed your state legislature to mandate expanded coverage for items such as mental health services, drug rehab, maternity, etc. These are very expensive whether you use/need them or not.Did you know that many of the policies in your state provided massages under the guise of “physical therapy”? You’re paying for that too. $60 massage for a $10 copay 26 times a year… that math.

2. You live in one of the highest COLA states

3. You have a significantly larger uninsured population who use hospitals and emergency rooms for their primary care at a cost of 2X-3X (or more) versus visiting a family physician.

4. State and federal government regulations do not allow you to purchase your coverage in another state. BSBS and the other carriers have a virtual monopoly–so you end up buying from a very limited offering. Again, you are paying for coverage you and your family may never need.

Remember, whenever you state legislature determines some health care should be “free” the cost trickles down to you. ACA offers “free” mammograms and “free” birth control. What’s free for one person means that cost is included in your health insurance premium. When they waive co-pays (as ACA does) the consumer of the health services has no motivations to reduce his consumption. When the government offers premium subsidies a similar family pays a much smaller premium for the same coverage you receive. When the government waives the pre-existing conditions clause there is no motivation for people to change their lifestyle (think about juvenile and overweight diabetics). When you see the obese guy on the electric dolly with the O2 bottle and a cigarette in his mouth, or the 350 pound guy super-sizing his lunch, you’re funding their health care, today and tomorrow. Just think, over 1/3 of the total population is overweight or obese–it’s only going to get worse.

The net result is that you are paying for your family’s coverage AND subsidizing the “free” services others consume. Your state legislature and ACA never told you that you adopted people that you don’t even know.

Posted by COindependent | Report as abusive