Marc Caputo

Marc Caputo: Winners, losers and promises of Obamacare

The U.S. Department of Health and Human Services had great Obamacare news last week: premiums nationwide will “be around 16 percent lower…

“…than originally expected.”

The second part of that talking point — about future savings relative to year-old government estimates — is crucial to understanding the public-relations war over the Affordable Care Act.

After years of conservative criticisms about Obamacare’s costs and effects, supporters desperately want more good news published about the unpopular but little-understood program. It goes online Tuesday when the public will have the first chance to get a real look at new plans for the individual-insurance market.

But though HHS Wednesday advertised the act’s “significant choice and lower than expected premiums,” some might find limited choices and Affordable Care Act rates that don’t look so affordable.

In the end, people don’t care about government expectations. They don’t buy insurance with estimates and projections.

People pay with money.

Many will likely pay less under Obamacare, thanks to tax subsidies. Those who earn in excess of four times the federal poverty limit won’t get subsidies and likely would pay more.

And others will be like Rebecca Reichert of Dania Beach, whose family probably falls somewhere between when it comes to paying premiums.

Reichert’s middle-class family is a case study in Obamacare costs and benefits, and how the president’s promises could play in Florida.

Under the lowest-cost Obamacare plan averages, Reichert might be able to save about 9 percent monthly; but under the highest-cost average plan she could pay up to 78 percent more, according to preliminary estimates produced for The Miami Herald by the Florida Office of Insurance Regulation.

“I was hoping it would be more affordable,” Reichert said.

But relative to what the market offers now, Reichert notes, her family would get more for less thanks to tax subsidies. Her husband, who has a pre-existing condition, is uninsurable now but would finally get coverage.

So Reichert’s family could ditch her three-person, $700 monthly plan and get a four-person plan for an average as low as $636 after tax credits.Under the Affordable Care Act, she should have better benefits, limits on co-pays and deductibles, and more of a guarantee that her insurance company spends her money on coverage instead of profits.

Reichert will probably switch.

Miami builder Eddy Gugliotta, who makes too much for subsidies, probably won’t. Under one scenario, Gugliotta might have to pay three times more. And though he’ll get better insurance, the cost could be too high.

“I could almost adopt a poor family!!!” he said in an email of the costs.

Still, these are just state estimates of averages; the final and specific numbers become clear Tuesday.

Obamacare boosters want the press to focus not on the Gugliottas, but on the Reicherts of Florida and, even more so, on as many as 3.8 million Floridians who have no insurance.

They want the debate centered on better coverage, better value and, when it comes to the 900,000 Floridians currently insured in the individual marketplace, the tax credits that help people get relatively more for less.

“Just look for yourself,” Obama said last week at the Clinton Global Initiative in New York. “You will discover that this is a good deal for you.”

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.