Wednesday, October 23, 2013

Death Spiral: Why ObamaCare Has Less Than a Month to Fix the Exchanges

Because the Exchanges are exceedingly difficult to navigate, only those with extraordinarily high incentive are getting through and enrolling.  And who are those folks?  The ones insurers can't cover by themselves.  It is adverse election at its worse where the cost of insurance has been driven excessively high by wait-times and burocrat-tech nightmares.   

... what we have now is a situation where only the extremely persistent can successfully complete an application. And who is likely to be extremely persistent?

  1. Very sick people.
  2. People between 55 and 65, the age band at which insurance is quite expensive. (I was surprised to find out that turning 40 doesn’t increase your premiums that much; the big boosts are in the 50s and 60s.) 
  3. Very poor people, who will be shunted to Medicaid (if their state has expanded it) or will probably go without insurance. ...