The Corner

Putting On Obamacare

In the frantic effort to actually implement Obamacare, some of the law’s champions are grudgingly coming to acknowledge that many of its critics’ key concerns were right. The latest example is the insurance companies’ panic over the perfectly obvious fact that the law is designed in a way that will encourage young and healthy people to avoid getting insurance until they get sick. Even the unconstitutional individual mandate (or as roughly one person in America would describe it, the constitutional uninsurance tax) doesn’t come close to making the economic incentives line up. One person who should know better put it this way to Politico this week:

“The key really is, how do you get younger people to buy coverage?” said Justine Handelman, vice president for legislative and regulatory policy at the Blue Cross and Blue Shield Association. “If you can jump in and out every time you need services, costs will go up.”

Well yes. If only every single conservative economist and commentator had warned the insurers about this in advance then maybe they wouldn’t have supported the law that will destroy their industry. Now that they’re facing the prospect of a massive flight of their most prized customers, the insurers are begging the Department of Health and Human Services to add various penalties on top of the mandate/tax. Here’s Politico again:

America’s Health Insurance Plans, the main trade group for health insurance companies, has asked HHS to impose late enrollment fees, so people who don’t sign up until they need the coverage will pay more than people who enroll right away. It’s the same concept that Medicare uses now for doctors’ and prescription drug coverage: Seniors don’t have to enroll right when they turn 65, but if they wait too long, they pay a penalty when they do sign up — and their premiums will always be higher as a result.

 

The insurers have suggested other penalties for people who delay, such as not letting them choose the most generous health plans and allowing insurers to impose waiting periods.

 

The Blue Cross and Blue Shield Association is asking HHS for the late enrollment fees and penalties, too. The National Association of Health Underwriters, which represents health insurance agents and brokers, called for late enrollment penalties too, warning that the impact on premium costs would be “enormous” if too many people wait until they’re sick or injured to buy coverage.

 

And the American Academy of Actuaries — the people who crunch all the numbers for health insurers’ costs — suggested late enrollment penalties and other measures, like not letting people sign up for coverage as often and requiring small employers to sign their workers up automatically.

Some of these “innovative” ideas—treating sick and healthy people differently when selling insurance, using closed enrollment periods to incentivize coverage, and the like—might make for an interesting health-insurance system someday, though it would certainly be one based on very different principles than Obamacare. But how exactly are they expected to work in conjunction with the particular system that these insurers supported, and the enactment of which they did a great deal to enable? And here’s an old fashioned question: What legal authority does HHS have to do any of this anyway?

 

America’s insurers, welcome to the “Obamacare won’t work” club. But you should know that the club has a very expensive “late enrollment penalty” for you: economic ruin.

Yuval Levin is the director of social, cultural, and constitutional studies at the American Enterprise Institute and the editor of National Affairs.

Most Popular

Politics & Policy

Hillary Ruins the Plan

Editor’s note: Andrew C. McCarthy’s new book is Ball of Collusion: The Plot to Rig an Election and Destroy a Presidency. This is the first in a series of excerpts.  There really was a collusion plot. It really did target our election system. It absolutely sought to usurp our capacity for ... Read More
Religion

Another Pop-Culture Christian Loses His Faith

It’s happened again. For the second time in three weeks, a prominent (at least in Evangelical circles) Christian has renounced his faith. In July, it was Josh Harris, a pastor and author of the mega-best-selling purity-culture book I Kissed Dating Goodbye. This month, it’s Hillsong United songwriter and ... Read More
Culture

Max Boot’s Dishonesty

Before yesterday, my primary criticism of the Washington Post’s Max Boot was political in nature. As I wrote in a recent book review, I found it regrettable that Boot’s opposition to the president had not prevented him from “succumbing reactively to Trump’s cult of personality, or from making Trump the ... Read More
Elections

A Brief History of Election Meddling

Editor’s note: Andrew C. McCarthy’s new book is Ball of Collusion: The Plot to Rig an Election and Destroy a Presidency. This is the second in a series of excerpts. ‘The 1980s are now calling to ask for their foreign policy back.” Thus spoke President Barack Obama just a couple of weeks before ... Read More
World

The End of Hong Kong as We Know It

The protests in Hong Kong have been going on for more than four months now, and no matter how the current crisis concludes in the coming days or weeks, it will mark the end of Hong Kong as we know it. The protests started in response to an extradition bill that was proposed by the city’s Beijing-backed ... Read More