The New York Times yesterday published a review of the Kaiser Family Foundation’s analysis of health-insurance premiums across the nation on its Prescriptions blog, which covers health-care issues. However, there is an economic fallacy lurking in its analysis worth pointing out.
The blog says:
If you live in Massachusetts or Vermont, the average monthly premium topped $400 a month in 2010, compared with just $136 a month in Alabama. The average across the country was $215 per month.
The authors of the analysis point out that some expensive states have higher insurance premiums because they make it easier for people with potentially expensive pre-existing conditions to get coverage.
The authors believe that the new federal health care law will probably reduce the variation in premiums, although they note that a state’s cost of living and overall cost of health care also contribute to the differences in premiums.
While it’s true that the Affordable Care Act will make premiums more uniform regardless of where you live, that idea is misleading. They’ll be more uniformly high — and covered up by subsidies for households between 133% and 400% of the poverty level, which puts the financial burden squarely on taxpayers. Additionally, the new law glosses over the reasons that certain states’ premiums are higher than average, like existing mandates for guaranteed coverage.
All of which leads us to question: “affordable care” for whom?