The Exchanges are setup to only stay in the black if 40% of "healthy invincibles" purchase plans. That isn't going to happen because: 1) like you said, I can get insurance after I get sick and I'm still covered, and 2) I can stay on my parents plan for 5 years of my "healthy invincible" years.
Biggest shock is going to come in late 2014/early 2015. That will be when the media gets to report on the exchange plan price differences between years. Since companies have to spend 80% of premiums on care, what percentage increase do you think is going to be come next year? Remember, they can't kick you off if you are sick or have a pre-existing condition.
The premium price will then skyrocket, even less people will be covered, and the end result will be death spiral.
Last edited by Samhain; 10-25-13 at 09:29 AM.
You need to learn the differences between a planning and execution. Progressive plans always LOOK great if your judge them by their end goal. There is little attention given to the moment or the failures, it's always the end that matters.
You spell out all this things that you think are super great about the ACA, but it means nothing to the family that no longer has insurance, can't afford this new insurance, and couldn't sign up for it even if they could.
All that the ACA does is take the donut whole of uninsured that that used to exist down at the bottom of the income range and shift it up a few notches. Now you have to work to be unable to afford insurance....
"“If we don’t deepen our ports all along the Gulf — places like Charleston, South Carolina; or Savannah, Georgia; or Jacksonville, Florida…” -Obama
At this time, it is too early to determine whether the ACA will lead to costly distortions in the health insurance market. A degree of risk exists, but much more data will be required to support evidence-based conclusions concerning that risk.
With respect to these early cancellations, at least two points are important:
1. Are policies being canceled simply because they don't contain all the required elements ("under-coverage" if you will) or for purposes of altering risk pools (adverse selection) to make them more profitable for the insurer. The News 4 article, which contains text from the Florida Blue press release, suggests the former.
2. When policies are canceled, do the former policyholders have a chance to enroll in new plans? Insurers cannot automatically enroll former policyholders into new plans by law and for ethical reasons. The News 4 piece suggests that former policyholders are being encouraged to speak with their insurance agents to enroll in the company's new plan, among other options. That further suggests that the adverse selection issue may not be involved, but again more data will be required before one can reach a firm conclusion e.g., cost barriers to the new policies will be important (if they are prohibitive, then adverse selection is playing a role; if they are commensurate with the added coverage on a net cost--or added cost reduced by the subsidy--then adverse selection is not a meaningful factor.