Behind the Headlines

This headline on the Drudge Report website caught our eye: “IRS: Cheapest Obamacare plan will be $20,000 per family…” The story linked to a news article on that explained the source for this information came from the recently released regulation explaining the “Individual Mandate” under health care reform. The surprising figure appears in the examples used to illustrate how to calculate the penalty for not purchasing coverage. The IRS is not setting the premiums for the exchanges in the regulation and most likely is using a round figure for illustration purposes. Similarly, in the Grandfathered Plan regulations (remember those?), they used eye-popping medical inflation figures, upwards of 25% inflation, to illustrate the limits on plan changes to retain Grandfathered status. Even now, after approximately 3 years, the inflation factor applicable to Grandfathered plan change limits is just slightly above 8%. So just as a proclamation that “Obamacare causes extreme medical inflation!” because of the examples in the Grandfather regulations would be inaccurate, so is the implication that the IRS examples in the regulation will have anything to do with what the actual prices of policies will be for individuals inside the health insurance exchanges.