Inaugural “See Me After Class” Award

 Didya Know The Press May Distort Stuff?

The problem with the inexact presentation of facts is that it limits the ability for people to reach a practical, workable compromise. Everyday people cannot be reasonably expected to know these facts, unless they are spoon-fed. The source of that spoon-feeding is usually the press. “See Me After Class” awards are going to those that may look like they are presenting facts, but that presentation is skewed, calling into question the entire conclusion of the article, study, whatever. Does “inaugural” mean most “egregious?” No, there are worse examples out there, this is just one of many.

This is a paragraph from the link (here), “Insurers want to raise Obamacare rates as much as 53 percent.” The writer is Sarah Kliff, one of the internet’s most prolific reporters on healthcare policy on the internet. Vox.com is founded by Ezra Klein, formerly of the New York Times.

First, the caveats. It is not my principal position that people are stupid or uneducated. In fact, reporters with the resumes of Mr Klein and Ms Kliff are impressive. It isn’t as if the positions attained were simple to get. That doesn’t mean that they are experts in the pricing of financial contracts, and that doesn’t mean that the reporting of facts is even-handed. Omissions of facts is a very important part of debate on a topic that is worth almost 20% of the national GDP. 

Everyday people need to be VERY careful in scrutinizing information or “reports.”

Let’s Take a Look
This article starts with facts, i.e. that proposed individual health insurance rates have been proposed in a list of states, and the highest proposed increase is in Maryland, at a whopping 53%.

This is the next paragraph (everything in blue is an exact reprint taken from  the article), and my comments are in red.

The big question: Why are insurance plans requesting such big rate hikes?

It is incredibly hard to pinpoint which part of the rate increases are a product of the instability and uncertainty the Trump administration has created around Obamacare’s future — and which part reflects a marketplace that was already struggling.

There are some clear ways the Trump administration has driven up rates.For example: CareFirst, a big marketplace carrier in the DC area, has tacked 15 percent onto its rates because it does not expect the White House to enforce the individual mandate. DC Area = a small fragment of all markets nationwide. This is could easily be an outlier, especially after you present a much large carrier, with a nationwide presence, immediately thereafter, and have omitted other published financial data. Further, if this turns out to be unwarranted, and the carrier has not spent 80% of premiums on claims, then policyholders will receive a rebate based on Medical Loss Ratio rules.

But other factors leading to the 2018 rate increases aren’t so clear-cut. Lots of insurance plans have said in their rate filings that they are worried about a “shrinking market” or sicker enrollees that will drive up premiums. Here’s what Anthem (Anthem is a national carrier, one of the nation’s 5 largest, and publicly held, meaning that its statements are subject to securities regulation), for example, told regulators in Connecticut about why it wanted a 33.8 percent rate increase:

“We are forecasting that the individual market will continue to shrink and that those individuals with greater health care needs will be the most likely to purchase coverage and retain their coverage, thereby accelerating the trend of increased morbidity. … This dynamic is driven by a guaranteed issue market with rating constraints and an individual mandate penalty that continues to be far less than the cost of coverage for most individuals.”

It’s true that before Trump’s election, insurance plans worried that the people signing up for coverage were sicker than they had expected and that enrollment numbers weren’t as robust as forecasters had expected. Where is the example where Aetna has reported $900 Million of losses in individual markets over the past 3 years alone, and there is no mechanism by which to recover those losses? Humana and UnitedHealthcare have reported results which are very similar in scope and scale to Aetna. Where are the examples where Marketplace carriers have made, on average 2-3% profit on individual health insurance over the past 3 years (reported by the Commonwealth Fund, a think-tank, and shown in this Newsletter in prior editions), and accepted all of the risks inherent in being the seller, such as unlimited lifetime maximum benefits?  It’s also true that the uncertainty around the law’s future — whether the administration will, for example, continue doing outreach around Obamacare enrollment — has exacerbated those concerns. If your stated evidence was the only information available, then yes, your conclusion may be feasible. But since you have completely ignored the other widely available data by the largest carriers and think-tanks in the nation, your conclusion of “exacerbated” doesn’t seem warranted.

At no point is there any mention of the fact that the risk corridor is now gone, and the risk corridor protected carriers from losses. The costs of the losses were borne by the US Government, which has not reported the size of those losses. In addition, where is the part that says that the comments in red above, occurred even with the risk corridor (reinsurance) in effect. That extra layer is now gone. The omission of this fact displays either an incomplete knowledge of the facts, or an intended distortion of facts.

At this point, it seems fair (your omission of facts is equal to fair?) to say that some part (unless you are in position to quantify, you shouldn’t be assigning “parts,” that means that it could be 1% for one part and 99% the other, is that your defense here?) of the 2018 rate increases are due to the Trump administration and some part are due to the law itself. It seems clear to me that the Trump administration is making Obamacare more expensive, which I’ve written about at greater length here. Attributing a particular amount of the increase to Trump, however, is going to be awfully difficult, if not impossible. So the only fully-reasoned sentence is here, at the very bottom of the article? In fact, if you added the information in red, the other conclusion could be “this is entirely possible,” and the primary reason for rate increases is ongoing difficult in individual health insurance markets which we have ample evidence to support, with a secondary, speculative reason being the proposed AHCA. 

SEE ME AFTER CLASS
Don’t worry, you won’t be the only one, and the others that are required to see me after class will be omitting and skewing actual information just as badly as you have.