ObamaCare to Hike California Premiums By Up To 146%; Krugman Said Monday They'd Decline

Forbes reported Thursday that as a result of ObamaCare, California health insurance premiums will increase by as much as 146 percent.

Yet on Monday, New York Times columnist and Nobel laureate Paul Krugman said premiums in the Golden State would decline once ObamaCare was fully implemented:

[W]hat would happen in California, where more than a fifth of the nonelderly population is uninsured, and the individual insurance market is largely unregulated? Would there be “sticker shock” as the price of individual policies soared?

Well, the California bids are in — that is, insurers have submitted the prices at which they are willing to offer coverage on the state’s newly created Obamacare exchange. And the prices, it turns out, are surprisingly low. A handful of healthy people may find themselves paying more for coverage, but it looks as if Obamacare’s first year in California is going to be an overwhelmingly positive experience. [...]

So yes, it does look as if there’s an Obamacare shock coming: the shock of learning that a public program designed to help a lot of people can, strange to say, end up helping a lot of people — especially when government officials actually try to make it work.

Not so fast, Mr. Nobel laureate. Here's what Forbes reported Thursday:

Last week, the state of California claimed that its version of Obamacare’s health insurance exchange would actually reduce premiums. “These rates are way below the worst-case gloom-and-doom scenarios we have heard,” boasted Peter Lee, executive director of the California exchange.

But the data that Lee released tells a different story: Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent. [...]

Except that Lee was making a misleading comparison. He was comparing apples—the plans that Californians buy today for themselves in a robust individual market—and oranges—the highly regulated plans that small employers purchase for their workers as a group. The difference is critical.

If you’re a 25 year old male non-smoker, buying insurance for yourself, the cheapest plan on Obamacare’s exchanges is the catastrophic plan, which costs an average of $184 a month. (That’s the median monthly premium across California’s 19 insurance rating regions.)

The next cheapest plan, the “bronze” comprehensive plan, costs $205 a month. But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the average cost of the five cheapest plans was only $92.

In other words, for the average 25-year-old male non-smoking Californian, Obamacare will drive premiums up by between 100 and 123 percent.

Forbes went on to explain how under ObamaCare, many in California will see their health insurance premiums double. 

Is this what a Nobel laureate in economics considers "an overwhelmingly positive experience?"

Apparently so.

At press time, Krugman had still not addressed Forbes' assertions at his blog.

Will he? Will others in the ObamaCare-loving media?

Stay tuned.

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Economy New York Times ObamaCare Paul Krugman Barack Obama
Noel Sheppard's picture