Dear Obamacare Haters, Eat My Lower Rates

With the gradual rollout of the Affordable Care Act (ACA), health care costs on the individual market will fall by at least 50% in New York, Governor Andrew Cuomo announced Wednesday. New York will join the growing list of states — including California, Oregon, Montana and Louisiana — that are boasting significantly reduced health care prices thanks to the ACA, proving the act is a massive success.

The New York Times reported that beginning October 1, individuals buying health insurance who now pay $1,000 a month will be able to shop for coverage as low as $308 a month. With federal subsidies, the costs will be even lower. 

The drop in rates has a lot to do with the online purchasing exchanges created by the ACA. These exchanges have sparked competition among insurance companies, driving prices down.

Think Progress lists insurance costs under the new exchanges: “The plans to be offered on the exchanges all meet certain basic requirements as laid out in the law, but are in four categories from most generous to least: platinum, gold, silver and bronze. An individual with an annual income of $17,000 will pay about $55 a month for a silver plan, state regulators said. A person with a $20,000 income will pay about $85 for a silver plan, while someone earning $25,000 will pay about $145 a month for a silver plan.”

New York’s old insurance laws had some features in common with the ACA. For example, New York laws prohibited insurers from denying coverage to individuals with pre-existing conditions, and required insurers to charge “all consumers the exact same rate.” However, the old laws did not encourage young or healthy people to invest in private coverage.

The new rates only affect New Yorkers who purchase insurance individually, and not those who receive coverage from their employers.  Until now, individual coverage in New York has been three times as expensive as the coverage provided by employers, stopping millions of Americans from buying private insurance.

Currently, only 17,000 New Yorkers buy health insurance on the private market, and about 2.6 million are uninsured, according to the New York Times. As many as 615,000 New Yorkers are expected to buy health insurance on their own as a result of the ACA.

The health care debate often boils down to whether you thinks health care should be treated as a fundamental right or a product. Most critics of the ACA see health care as a product and therefore think it iswrong for the government to control insurance rates.

But buying health insurance cannot be compared to buying a flat screen TV; it is a unique investment. Ezra Klein makes this point in his op-ed in the Washington Post: “You don't buy health insurance hoping to get more than you paid in. That would mean, in essence, hoping to get terribly sick so you could get the satisfaction of running up high medical bills. You buy it because, if something awful happens, it protects you.”

The point of the Affordable Care Act is that it protects Americans. It offers protection to the roughly 45 million uninsured citizens, while also providing a safety net for the rest of the country. Critics of the Affordable Care Act or those with coverage from their employer may see little value in the law now, but they would probably feel differently if they didn't have a job. Nobody wants to pay for health insurance until they need it.