As the Left continues to repeat patent falsehoods and indulge in flights of fancy about Obamacare, the adults in the room are adjusting to the new realities with alacrity. It was obvious from the start that America’s hospitals and pharmaceutical companies had decided to collude with Obama and thus ensure the best possible deal on coverage and reimbursement rates. Smart investors are pushing money in their direction, while pulling out of parts of the insurance business that will be rendered unprofitable by problems of regulation and adverse selection. CNBC reports the views of Carl McDonald, health-care analyst and managed-care analyst at Oppenheimer:

“There is certain clarity as to what’s in the bill, but we’re just trading that clarity for a lot of uncertainty about what these companies are going to earn in 2014 and beyond.”
The bill has been criticized as an “enabling legislation,” which means “it’s not spelled out and up to the administration to figure out how to implement it.” As a result, McDonald said, many of the individual markets in the U.S. are going to be “destroyed.”
“I don’t think any of these companies are going to be able to earn any margin in that product because of all the adverse selection mainly because of the fact that there’s a very weak individual mandate,” he commented.

Yep. While I believe the mandate is unconstitutional – and I hope that the state attorneys general who are talking about litigating the matter stay firm in their resolve – I also think it is not stiff enough to prevent adverse selection. It will make sense for healthy young people to stay out of the market, pay the resulting fine (which is basically a new tax on the middle class, I’m shocked to discover), and then sign up if they require significant medical attention in the future. Some may also do this because, after due consideration, they’ve decide that they will not comply.