Does the ACA shaft the working class and middle class as Robert Laszewski claims?

HHS released statistics yesterday showing that "69 percent of enrollees who selected Marketplace plans with tax credits had premiums of $100 a month or less, and 46 percent of $50 a month or less after tax credits." Among the 87% of buyers on ACA exchanges who qualified for federal subsidies, the average premium was just $82 per month.

Healthcare industry consultant Robert Laszewski is unimpressed. In a post titled "Obamacare: What About the Working Class and the Middle Class?" he writes:

The lowest income people––who pay the lowest premiums and out-of-pocket costs––are the ones who are obviously signing up. That explains why the average consumer subsidy is so high and the average net cost is so low.

As I have said on this blog before, the biggest consumer problem Obamacare has is that the plans––with their still high premiums even after the subsidy, big deductibles, and narrow networks––are not attractive to working class and middleclass families and individuals who don't qualify for the biggest subsidies.

Simply, the Obamacare plans are unattractive to all but the poorest who get the biggest subsidies and the lowest deductibles

While Laszewski's market knowledge is to be respected, he rarely backs up his assertions as to what insurance buyers allegedly want with data.  Evidence suggests that the group of Americans who earn too much to qualify for subsidies yet lack access to employer-sponsored insurance is smaller than he thinks, and wealthier than he thinks. The ACA's direct winners will continue to outnumber its direct losers -- those who will pay more for coverage in the individual market -- and get less value -- than they would have had the law not passed. Consider the following:

Robert Laszewski's ACA blind spot

Robert Laszewski, health insurance consultant and blogger, is among the critics of the Affordable Care Act whom supporters of the law respect the most. He knows the market, he knows the law, he wants to see everyone insured, he's not averse to calling out Republican idiocy and mendacity, and he wants to fix the law, not repeal it. Ezra Klein's Wonkblog named him "Pundit of the Year" for 2013.

Yet Laszewski has a bias, which progressive healthcare reporters, including Klein, are slow to call out.  His ur-insurance buyer is a veteran of the pre-ACA individual market, healthy, ineligible for ACA subsidies or for only limited subsidy, and so hit by rate shock.  His chief complaint seems to be that ACA-compliant plans are weighed down by unnecessary Essential Health Benefits, which drive up the base premiums and so increase the hit to the unsubsidzed.

The plight of this cohort is real, and the law could be amended to ease it. Yet Laszewski generally fails to acknowledge that such victims are far outnumbered by ACA beneficiaries, that negative responses to the law have been shaped in large part by five years of Republican disinformation, that guaranteed issue is a much larger driver of unsubsidized rate increases than the benefit mandates, and that the law is on target so far to meet long-term CBO projections.

Laszewski's bias in on display in his latest post -- which pleased progressives by acknowledging that Democrats pledging to modify the law are more in line with public opinion than Republicans vowing to repeal it. Here's the nub of his case that the law is in trouble because people do not like the core offering:

Reporters read insurance execs' testimony before yesterday's House ACA hearing. Looks like GOP reps didn't

Last week, the House Energy & Commerce Committee put out a mendacious report claiming that insurance company executives had submitted data to them showing that just two thirds of ACA private plan enrollees had paid their first month's premium. ACA signups tracker Charles Gaba shot that rotten fish in a barrel within an hour of the report's release:.

...they're VERY clear about what they're claiming: that as of 4/15/14, only 67% of all QHP enrollments via Healthcare.Gov had paid their first month's premium, right?

Well, there's a serious problem right there, because out of the 8 million or so enrollments as of 4/15, only 5 million of the first month's premiums were even due.

Gaba was the first of many; the claim was widely debunked. That didn't deter the Committee from calling health insurance executives to a May 7 hearing,  presumably to ratify their statistical legerdemain.  Unsurprisingly, the hearing, conducted by the Oversight and Investigations Subcommittee, did not go as planned. Jonathan Bernstein marvels at the manifestation of an apparent feedback loop:

But yesterday, a House subcommittee invited insurance company executives to testify and, according to the Hill, Republicans on the panel were “visibly exasperated, as insurers failed to confirm certain claims about ObamaCare, such as the committee's allegation that one-third of federal exchange enrollees have not paid their first premium.”

We don’t have to rely on reporter interpretations (here’s another one). It made no sense to hold the hearing unless Republicans were (foolishly) confident that the testimony would support their talking point, instead of undermining it.

The only plausible explanation is that closed feedback loop. Either members of the committee managed not to be aware of the criticisms of their survey, or they mistakenly wrote off the criticism as partisan backbiting.

Kevin Drum piles on:

Obviously Republicans were caught off guard at yesterday's hearing, and that could only happen if they really and truly believed their own flawed survey. And that, in turn, could only happen if they get pretty much all their information from Fox News and don't bother with anything else. 

The bubble is apparently more airtight even than Bernstein and Drum fathomed, because the executives' prepared testimony had already hit the newswires before the hearing started. Bloomberg's Alex Wayne had the whole gist in a story that ran on Wednesday morning, prior to the hearing:

OOPS! Don't forget the lower-profile Obamacare subsidies

Robert Laszlewski, one of the better-informed of the Affordable Care Act's relentless critics, doubts the law's sustainability based mainly on one much-reiterated premise:

The biggest flaw is that the product the Obama administration is trying to sell to consumers is not the product people want to buy.

By that he means that there are millions of people (like himself) who are forced to subsidize insurance for the sick (who can no longer be charged more based on their medical condition) or the relatively old (who can now be charged a mere three times more than the youngest plan members, rather than up to five times more, as was common pre-ACA) -- or to buy coverage for services they don't want, such as childbirth or mental health or substance abuse treatment.

It's true that some people in those categories will pay more for insurance on the individual market under the ACA than they did previously, though probably for only a short period (historically, most people buying insurance in the individual market  have not stayed long).  But I don't think they will affect the law's long-term viability by fleeing the market in droves -- because there probably are not droves of them.

Despite prices and deductibles that can look daunting to, say, healthy subsidy-ineligible 27 year-olds, a majority of people who lack access to employer-sponsored insurance are likely to be satisfied with their ACA options.  Two large categories are likely to be satisfied: the subsidized, and those whose household includes someone with a preexisting condition.