I’ve been watching the issue of child-only plans with some interest, because I think it may offer us a preview of how the rest of the PPACA might unfold. So far, I haven’t been disappointed.
So far, it’s going according to script:
Robert Zirkelbach, spokesman for AHIP [said] “In the small but critically important niche market for child-only policies a powerful incentive has been created for parents to defer purchasing coverage until after their children need it. Plans are therefore having to make very difficult decisions about offering new child-only coverage.”
Sigh.
So let’s recap. You can’t have guaranteed issue and community ratings without a mandate, or you get adverse selection. You can’t have a mandate without subsidies, or people can’t afford what you’ve mandated they buy. Such is the truth of the fragmented way we’ve chosen to reform our system. Such is what the administration said again and again during reform.
Yet they went ahead and told the insurance companies to enact the first step (covering children no matter what) before the second (the mandate) went into place. Predictably, the insurance companies balked, because they claim that this will lead to parents’ gaming the system. Secretary Sebelius’ response?
Essentially, it’s shock that insurance companies would balk at this. Hello? Companies want to make money. It is their nature.
They could implement a mandate now, but that’s not going to happen. So what else can they do?
HHS also issued new regulatory guidance that could make it easier for insurers to sell the policies. The agency said insurers could raise rates based on health condition — though doing so will be illegal beginning in 2014; issue different rates for child-only policies and dependent children; impose a surcharge for dropping coverage and subsequently reapplying; and instituting rules to preventing “dumping” the policies
So the big solution? Drop community ratings. Yeah, this is going well. And then what can we expect?
The moves are likely to drive premiums up, if insurers choose to start selling the policies again.
If only we had subsidies.
I understand why Democrats wanted the bulk of health care reform to begin in 2014. Few of those reasons will make sense to the average American. That’s likely why the Democrats wanted some “good” things to start immediately.
But, if you believe the explanation as to why the whole thing, complicated as it was, was necessary, then why are you so shocked that trying to implement it piecemeal is running into problems?
This is only going to get worse before it gets better.
