Insurers and regulators have made an astonishing discovery: The Affordable Care Act individual health insurance market is pretty much a mess.
Strangely enough, it turns out that if you find new subsidized health insurance enrollees by seeking out people too disconnected from the rest of society to have Social Security numbers, and advertising to people who used to have trouble getting medically underwritten coverage because they have cancer, hemophilia or HIV, many of those people will have high claims.
Amazing. Who could have imagined this?
And how was it possible for health insurers to guess that if, even in 2016, they would be setting rates without having much ACA World data, breaking even might be challenging?
Who woulda thunk?
Clearly, many people woulda thunk, and did think such thoughts.
One of the main, utopian goals of the ACA drafters was to find a way for sick people to get health coverage for about the same price as healthy people.
Just about everyone outside of the health insurance community likes that idea.
Hardly anyone outside of the major medical insurance field, even in the life insurance or auto insurance markets, has any patience at all for the idea that high prices should keep people with diabetes from getting commercial coverage, or that people with diabetes ought to make do with waiting for two or three years for expensive, limited “risk pool” coverage.
Many state efforts to eliminate medical underwriting have failed in the past.
The ACA individual health insurance market and public exchange provisions are as strange and complicated as they are because the ACA drafters knew they had to use every available tool to encourage and push healthy people to get covered to offset the claims of all of the sick people who’d get covered.
The drafters knew, in effect, that they were lifting the rug off of the bad part of the U.S. health care finance system, and that were would be many ugly, squirming roaches lurking there.
The ACA risk corridors program, the ACA reinsurance program, the ACA risk-adjustment program, the ACA individual coverage mandate, the ACA employer coverage mandate, the ACA exchange system, the ACA exchange plan premium tax credit subsidy system and the ACA exchange plan cost-sharing reduction subsidy program are all just a bunch of complicated statutory shoes to mash the bugs that were going to come crawling out once the rug came up.