Is Obamacare Affordable?

There has been some celebrating on the port side ever since stories like this one came out, indicating that premium costs associated with the Affordable Care Act--Obamacare--are, well, affordable. We are to believe that 

[b]ased on the premiums that insurers have submitted for final regulatory approval, the majority of Californians buying coverage on the state's new insurance exchange will be paying less—in many cases, far less—than they would pay for equivalent coverage today. And while a minority will still end up writing bigger premium checks than they do now, even they won't be paying outrageous amounts. Meanwhile, all of these consumers will have access to the kind of comprehensive benefits that are frequently unavaiable today, at any price, because of the way insurers try to avoid the old and the sick.

Paul Krugman is positively gleeful as he contemplates the political consequences that he expects to ensue should these findings hold up:

. . . think about the political dynamics. Because the Supreme Court decided to let states opt out of the Medicaid expansion, some states — notably Texas — will have a pretty dysfunctional version of Obamacare in 2014, although even those systems will provide significant benefits to many people. Still, the whole political calculus was supposed to be that Republicans in red states could point to the horrors of Obamacare and ride them to political victory. Instead, it looks as if we’re going to see blue-state residents reaping the benefits of a functional health care system, while red-state residents are denied many of those benefits, for what looks like no better reason than mean-spirited spite — because what’s going on is, indeed, mean-spirited spite.

Predictions that Obamacare will be a big political issue are probably right — but not in the way gleeful conservatives imagined.

Unfortunately for Krugman et al., these claims of triumph do not give us some very important details about the California findings. For those details, one must consult Walter Russell Mead:

On Wonkblog, a pro-ACA outlet that cheered loudly when the California numbers came out, Sarah Kliff argues that success in the Golden State might not be replicable elsewhere. According to Kliff, California is one a few states to take an “active purchaser” approach to the ACA. This means that a state board has the power to select which plans will be available in the exchange, and can reject any plan whose rates are too high. Most other states, however, do it differently:

The vast majority of states…operate under a “clearinghouse model.” In that scenario, any health plan that meets a set of criteria gets approval to sell on the health insurance exchange. All 33 state exchanges that the federal government will run operate under this  clearinghouse model. So do 10 of the 18 state-run health exchanges (this includes the District of Columbia). Two states, Kentucky and New Mexico have not, according to Kaiser Family Foundation, addressed the issue yet.

In the final count, only six states are currently “active purchaser” states, so nationwide might not be as low as California’s projections suggest.

If that’s not enough to temper any lingering optimism, consider that the state had to make some significant tradeoffs to keep rates so low, as an 
LA Times piece reveals. Under the plans offered on the exchange, consumers will have access to far fewer doctors and hospitals. Blue Shield of California, for example, will give its exchange customers access to only 36 percent of its regular physician network . . .

Mead ends his piece with the following words: "With Obamacare, even the good news is often bad." Quite so.