A friend of mine on Facebook (who admits he based it on a statement by Senator Michelle Benson, on the Dave Thompson show) notes the wierdness of the state’s math in arriving at the “4.5% increase in MNSure Premiums” number that the media is trumpeting.
He put it this way: If a fast food restaurant serves 500 customers and has $5,000 in the till at the end of the day, that’s an average of $10 per person.
If a coffee shop next door has 5 customers and makes a grand total of $25, they averaged $5 per sale.
So what was the average amount spent by customers to those two stores?
- $7.50 – the average of $10 and $5? Or…
- $9.95 – $5,025 in total receipts divided by 505 customers?
If you’re a Democrat, you picked “1” – which is the average price of two items, but is not the average amount spent by the customers If you undestand economics, you picked “2”.
What the state has done – and the media has reported more or less uncritically – is tell us the average price of the plans (that are still on the market). Not the average amount customers will have to spend to stay in the exchange – which includes nearly 2/3 of all MNSure customers who lost their lower-priced Preferred One plans, and who will be paying at least 20% more.
The state’s spin is dishonest. The media uncritically running the spin is an abdication of their purported job of keeping government honest.