• Paging Helen Lovejoy

    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.”


    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.

    • I’ve left a similar comment on another post here but I can’t find it so I’ll double dip. Wouldn’t a public option have put the insurance companies in more difficult position as far as this goes and had them taking whatever loss they would have incurred covering these kids in order to protect market share for when the public option does roll out? I’ve come to believe that as an article of faith but if I’m wrong, I want to know it. I dislike a lot about the ACA but I think its biggest failing is the lack of a national public option.

    • This is incredibly frustrating. Gutsy of Sebeliius to use WSJ as forum for her platform, but a) letters to the editor in 2 days will pillory her–and rightfully so, and b) she must be smart enough to know that setting up insurers as the demons will only pay short term dividends and give her and the rest of HHS headaches long term for walking down the wrong path.

      I get politics. I get the special interest group thing. I know why Obama had to elevate MCO’s as the bad guys, but enough. They are part of the problem, yes, but Aaron has it right. They make money and their motives are clear. When the heck is anyone in this administration going to call out and cite the root cause drivers of health care inflation. At least begin to hint.

      My goodness, dont inculpate the GOP when you are guilty of the same crime.