Barbara Shelly

Where’s the train wreck? Insurance rates in N.Y. to plunge under Obamacare

In this March 23, 2010, file photo President Barack Obama is applauded after signing the Affordable Care Act into law in the East Room of the White House in Washington.
In this March 23, 2010, file photo President Barack Obama is applauded after signing the Affordable Care Act into law in the East Room of the White House in Washington. AP

Sorry to interrupt the incessant drone about the “failure” of Obamacare, but from the state of New York comes news that insurance policies in the individual market could cost as much as 50 percent less when the marketplaces called for in the Affordable Care Act get started next year.

Here’s how a

front-page story

in The New York Times describes the situation:

“State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.”

Only about 17,000 persons in New York currently purchase insurance on their own, according to The Times. That leaves about 2.6 million uninsured. The federal Affordable Care Act requires everyone to purchase an insurance policy, which will create a deeper and wider pool, and enable insurers to reduce rates.

New York probably isn’t typical of how things will work in all states. Its policies on the individual market are the most expensive in the nation. Why? Because the state requires insurers to offer people policies regardless of preexisting conditions, but has no mandate that everyone must purchase insurance. That’s a formula for sky high rates and lots of uninsured people. And it’s exactly what Republican politicians are asking for when they demand that the White House postpone the controversial individual mandate.

So in New York, prices have nowhere to go but down.

But other states that are working hard to set up insurance exchanges, like California, Oregon, Washington, Maryland and Vermont, are also reporting encouraging news about competition among insurers and competitive rates in the marketplaces.

Not exactly the imaginary “train wreck” that has the U.S. House preparing to vote to repeal Obamacare for, what, the 38th time?

Obamacare opponents, for their part, are touting a new survey by a strident foe of the health care law, the U.S. Chamber of Commerce, which found that two-thirds of employers surveyed said they weren’t ready for the law’s new mandates. And 71 percent said they’d be less likely to hire because of the law, which requires companies with 50 or more full-time employees to offer health insurance or pay a fine.

Is a small business ever ready for a new mandate? I think not. Really, it’s surprising that a third of the employers surveyed said they were prepared. This is beginning to sound like the way most Americans approach the Christmas holiday. We know it’s coming; it’s right there on the calendar. Yet we’re never ready for it. And somehow we always get by.

As for the threats to hire fewer workers and cut others to part time, remember that no employer covered by the Affordable Care Act’s mandate is currently required to provide health insurance to workers, but more than nine of 10 of them do. Health insurance is a tax-free form of compensation that enables companies to recruit and retain good workers. None of that is going to change.