"If health costs are looking good, what’s with the spike in premiums?":
Obamacare Hits a Pothole, by Paul Krugman, NY Times: ...Obamacare ... has hit a pothole: After several years of coming in far below predictions, premiums on covered plans have shot up by more than 20 percent.
So how bad is the picture? ... Health reform had two big goals: to cover the uninsured and to rein in the overall growth of health care costs... Sure enough, the fraction of Americans without health insurance has declined to its lowest level in history, while health cost growth has plunged...
But if health costs are looking good, what’s with the spike in premiums? It only applies to one piece of the health care system — the “exchanges”... established for people who aren’t covered either by their employers or by government programs, mainly Medicare and Medicaid.
The way the exchanges were supposed to work was that both healthy and less-healthy people would sign up, providing insurers with a good mix of risks that let them offer reasonably priced policies. ...
In many states, however, not enough healthy people signed up — and now insurers are either pulling out or hiking their premiums to reflect the not-so-good risk pool. Since premiums have until now been well below projections, this only brings them back up to expected levels. But it’s clearly not good news.
How many people are hurt by these premium hikes? Not as many as you may think..., a fraction of a fraction of the population (which admittedly may still be several million people). Oh, and bear in mind that many of those affected ... have pre-existing conditions, which means that without Obamacare they wouldn’t be insured at all. ...
Can the current problems be fixed? As a technical matter, the answer is clearly yes. Strengthen the mandate; expand the subsidies; close the loopholes that have allowed some insurers to bypass the exchanges; take a more active role in setting standards and reaching out to families to make them aware of their options. Some states are doing much better than others, and it wouldn’t take a lot of money to expand best practices to the nation as a whole.
The trouble is that Congress would have to vote to spend that money. So unless Democrats manage to take the House (unlikely) or Republicans are willing to cooperate in the public interest (even more unlikely), the easy fix ... will have to wait for a while.
So, is the latest health care news disappointing? Yes. Is it catastrophic? Not at all.