The LA Times reports on an announcement that Obamacare premiums will rise an average of 6% next year:
Individual health insurance premiums are set to rise by an average of 6% on the state marketplace next year amid rebounding demand for medical care and uncertainty surrounding federal financial assistance, Covered California said Tuesday....Each year from 2020 to 2022, rates in the state rose by less than 2%.
Covered California was almost apologetic about this, but they shouldn't be. It's true that federal premium assistance from the American Rescue Plan is likely to go away, but there's no reason to overthink this. You just need to account for inflation, which is very high this year and therefore affects premiums next year:
After you account for inflation, today's announcement is good news: It represents the second best premium growth of the past four years, not the worst. Instead of a 6% increase, it's really a 2.3% decrease.
After adjusting for inflation, we see that the cost of everything remains unchanged? Just like always?
If oil prices had only increased to $200, the healthcare premiums would be even cheaper?
This makes sense?
Are you saying they shouldn't get kudos for keeping costs down when the median costs rise?
How does the actual coverage change as a result of inflation? Unless the nominal values change, I guess deductibles go down, which is good?
I think this question should be framed in terms of “cost per unit of coverage” which isn’t a real unit and impossible to quantify but it’s not a one-sided transaction. Are they getting the same thing for a smaller real cost, or more for less cost, or less for less cost, etc…
Technology increasing means you always get more for your care unit.
If someone’s wages were rising with inflation it might be one thing to say that a less than inflation rate premium increase was a “decrease” but Kevin, you have been telling/showing us wages have not been increasing with inflation. Have wages been increasing faster than premiums? If not then it is still an increase in premiums.
This. Most people’s wages don’t automatically adjust for inflation, even in good times. And as Kevin has been talking about for the last year or so, wages have not been keeping up with inflation. So the “good” news that health insurance premiums haven’t increased as much as the state says they have needs to be viewed in conjunction with the fact that most people’s wages have actually decreased over the last year or so.
Not sure why Kevin doesn’t realize this, given his incessant need to point out that media fails to adjust for inflation. If you adjust for inflation, you’ve got to adjust both sides of the ledger for inflation - both the income and the expenses of a typical household - to get the true effect/strain on household budgets.
Basically he'll just cherry pick whichever data point makes the news look positive.
If the general narrative is that inflation is high, he'll pick out data points to say it actually isn't that high. If the narrative is the price of something has gone up a lot, he'll then point to high inflation and say the prices actually aren't high.
Things are always A-OK.
OK Hitler.
Honestly never would have seen the supposed meaning behind my name here if you hadn't made your accusation. Keep projecting if you want.
You could register a new name? He’s not the only one; the neo-Nazi connotation was the first thing that came to my mind - the 88/HH is a pretty well-known code.
How did you randomly choose sig heil hitler 88?
Sighh is “sigh” with an extra h, to express a long sigh, which was the sound I made to the post I first replied to. I was born in 1988.
I mean I guess this is just unbelievable to multiple people. I must be out of touch with what’s hot in the white supremecist phrase book. What does 88 mean in that context? Really not trying to google it and get some targeted ads for tiki torches or whatever.
Also you see “sighh” and your mind goes to sig heil? I guess I sound lying or naive but that would have never crossed my mind prior.
Anyway like I said before, you might think my explanation makes no sense, but to me it makes even less sense that I would make a name like that and then not even post anything remotely relevant to it.
But yes, it seems like I should change it.
I will assume you are honestly confused and will therefore answer you. It somewhat stretches credulity but maybe you truly are ignorant of the implication. H is the 8th letter of the alphabet and the numbers 88 became a shortcut in the neo-nazi community for identifying each other. It is frequently seen in tattoos and the like. Therefore regardless of whether you chose the name for other reasons, if you don't want to be assumed to be a neo-nazi you should change your nickname immediately.
Ok well I had been thinking the whole "sighh" thing was ridiculous, but now that I know about the 88 thing as well, I get why no one believed/believes that's not at all what I was referring to. I mean the odds of this semi-random name unknowingly having such such an apparently clear connection are probably 1 in 100 million.
But, that's seriously what happened! This is the kind of thing that makes me think we're living in a computer simulation.
Anyway, i doubt most people believe this, but that's fine. I guess the last thing I want to say before i retire this name forever is that I think some of you might be overestimating the general population's knowledge of white supremacy codes. I would bet that most people who are 1) not white supremacists or 2) not very active on online message boards/comment sections probably are unaware of a lot of this stuff. Or I could just be shockingly clueless.
That would only make sense in an argument if Kevin wasn't constantly adjusting wage gains against inflation, too.
So in CA do people get auto-magical raises to keep up with inflation? Because that's the only way this is good news.
Things like insurance premiums need to be normalized by (otherwise) disposable income, not just inflation. Kevin does this for some things but not this time.
Some do, yes.
Ask about Unionizing.
So the Democratic party line is now that prices aren't rising when adjusted for inflation? I don't think this is a winner.
Kevin Drum is not a Democrat.
Much less the entire Democratic Party.
I have to chime in and agree with those above who point out that inflation cuts both ways for most of us. It lowers the value of the dollars we earn too! So if my wages have decreased in value by say 8% due to inflation doesn't that mean that a 6% increase in the price of something is actually a 2% increase for me? In my personal experience, wage increases never keep up with the increased cost of health insurance premiums. I don't know how many times I have run the numbers after the annual salary review to find that my take home pay actually went down due to health insurance premiums outstripping any increase, plus there is often a reduction in benefits and an increase in deductibles.
I'm in the minority that appreciates Kevin pushing back against the daily drumbeat of doom and gloom. A 6% rise of anything when overall inflation is higher is just not a bad thing. Yes, wages have not been keeping pace, but they're going up at about 5% right now (don't know about next year) so again a 6% rise of any service or commodity is not terrible news in that context.
And let's remember Covid is not over, the pandemic is not over and the disruptions and warping effects will not be fully understood for years. Indeed, one could easily say the lack of deeper corruptions and problems is remarkable. Context, people, context.
I'm all for "context" and looking on the bright side, but it is just plain incorrect to publish a headline saying that Obamacare prices are going to fall. Prices are rising, even taking into account inflation. This article's lead is just misleading!
No they aren't, even accounting the silliness in overall cpi.
I agree that Kevin is baiting us all a bit with the headline.
But if the current inflation really is 9% as has been beaten into our heads of late, then the LA times describing a 6% increase without adjusting for inflation is also misleading, isn't it ?
No, it isn't misleading.
It's accurate to say that healthcare costs have increased less than the average CPI inflation. It is not accurate to say that healthcare costs have gone down because while the cost has increased, other costs have increased even more.
It's not just inaccurate, its completely wrong.
Kevin attempt to adjust everything by the rate of inflation often leads to useless data and bad conclusions.
I don't particularly like how Kevin has phrased this but most people have no idea how to account for inflation. In a media moment when inflation is getting hyped every 5 seconds I think the LA Times should take the time to point out that the 6% figure is the nominal increase and explain what that means in the context of 9% inflation, which admittedly may not (indeed likely not) be true next year when the 6% increase takes affect.
Would it be accurate to say that the cost of food has gone up over the past 50 years ? Well, yes it has, but would it not be more meaningful to say that the cost of food has gone down adjusted for inflation ?
Agreed
Isn't:
(1) inflation more or less guaranteed to reduce economic power of the working class because,
(2) any increase in wages will be met with a corresponding increase in prices, unless
(3) somehow, the worker in question can be more productive, which is really not how it works for vast swaths of the workforce?
That's why the rest of the first world has single payor health care, at least.
Its going to go up, because all the people who work in healthcare will get raises, plus, doctors need raises, plus, health care technology only gets more expensive.
Without a single PLAYER to push back, capitalism dictates only one result.
This plays out in all sorts of sectors of the economy. Its impossible for workers to do better without inflation almost instantly eliminating whatever benefits the working class gets.
The only thing that gets "better" over time is the relative value of products, better computers, better cell phones, better streets (to the extent anything is "better" over time).
It’s the lack of economic power of the working class that results in them being hurt by inflation. Productivity improves pretty much continuously; almost all of the increase comes from technological advancement, but since the decline of unions in the private sector all the gains have been taken by management and investors. The separation of powers served us well for over two centuries in government, and a balance of power among labor, capital and government served us well for the four or five decades that it existed … Vote progressive, overturn Citizens United, empower labor!
Yes, broadly stated, its good news. But
- The ACA covers less than 10% of folks in California
- Its not clear how the ACA premiums impact non ACA insurance in California (I have seen contradictory analysis on this point)
- Medical costs in the US are sky high on a global basis: a 6% increase on a huge number....
A 6% nominal increase in premiums is only good news for those who got at least a 7% nominal raise.
The average person knows exactly how much health coverage is costing in nominal terms because they see it in their checkbook every month when the premium is deducted from their paychecks, and even if you're on one of the exchanges you probably get it deducted directly from your checking account (I did when on the exchange). Since most people live paycheck to paycheck they know exactly how much they have left over after the basics are paid. If at the end of the month they see they have less than normal they have automatically taken into account inflation. Inflation not only reduces the impact of price increases but also reduces the value of your paycheck.