But just because something’s a deal doesn’t mean someone can buy it. Just because something is projected to cost less than it was originally estimated doesn’t mean it’s affordable in and of itself.
It’s an important point for Reichert; she and her husband are between jobs.
Money is tight for many in Florida, a chronically low-wage and low-benefit state with an estimated 656,000 unemployed workers. Florida has the nation’s second-highest rate of the uninsured, almost 25 percent.
If the uninsured don’t buy a plan, many will be fined under what’s called the individual mandate. It was passed to ensure that a large population of healthy young people enter the market to offset the cost of less healthy people.
If all the currently uninsured enroll, the individual market could grow by a factor of five, to 4.7 million.
But since about 1.7 million Floridians qualify for tax credits, according to the liberal advocacy group Families USA, it’s unclear how many will pay more or less for insurance.
Some of the currently uninsured might resent paying anything for coverage they don’t want.
“There will be winners and losers,” said Christine Eibner, a senior economist with the RAND Corp. who helped author a study showing that pre-subsidy individual premiums before and after Obamacare should be about the same statewide on average.
Statewide averages and studies of them are estimates and projections. Insurance rates are, ultimately, deeply personal and partly depend on a person’s age, county of residence and number of people insured. Estimates vary, and critics charge that Florida’s current stingy individual plans aren’t really comparable to more-generous Obamacare plans that go online Tuesday.
Florida’s insurance regulation office used a different methodology from RAND, based on insurers’ state filings, and found that pre-subsidy premiums could increase by an average of about 44 percent statewide, far higher than the double-digit increases Floridians have been shouldering for decades.
A major cost-driver: “guarantee issue,” the mandate that insurers issue policies to all comers, regardless of health status.
“Guarantee issue is the 3,000-pound gorilla,” said Wenceslao Troncoso, an insurance office deputy commissioner. “If you have to cover everyone and you expand benefits, it’s going to drive up rates. It’s not rocket science.”
Indeed, despite the complexities, insurance has a simple aspect to it: spread risk to use money from one group (healthy people) to help underwrite the costs of another group (sick people).
Adding more people to the system also increases potential profits to insurance companies, who are guaranteed new customers, many of whom could be subsidized by taxpayers.
And since Florida’s anti-Obamacare Republican Legislature and governor exempted the new plans from rate review by OIR for two years, there’s a chance insurers could charge more without much of a check from regulators.
When it comes to rate-review authority, projects and estimates matter.
Those add up to real dollars that the Gugliottas and Reicherts of Florida might have to pay.