The people who designed the rules for the Patient Protection and Affordable Care Act (PPACA) individual health insurance universe went to great lengths to try to make the PPACA exchange risk pool as similar to the off-exchange risk pool as possible, to avoid letting one part of the market pull the healthier enrollees away from the other part.
Individual health plans in both sectors are supposed to use the same underwriting and pricing rules, and based their benefits designs on the same essential health benefits (EHB) package benchmarks.
An issuer that sells an on-exchange and an off-exchange version of the same product is supposed to make the agent compensation (or, these days, lack of compensation) the same.
But it looks as if the PPACA World designers have a big problem: the PPACA premium tax credit money that moderate-income consumers can use to pay for individual health coverage is available only through the PPACA exchange system.
In many states, the rule of thumb seems to be that the nice, employed, honest people who need individual coverage go to the off-exchange market.
The thought is that sick people who want to lie on their coverage applications go to the public exchange system and “attest” (swear) that they meet whatever mysterious requirements the exchange managers have decided to impose.
On the one hand, some people want PPACA World to implode because Obama likes it.