November 15, 2013


What Obamacare Needs Now ... (Ross Douthat, 11/15/13, NY Times)

[A]t the risk of sounding like what the kids call a "concern troll," it does seem like there is a semi-plausible policy response to the rate shock issue, which wouldn't roll back the ongoing plan cancellations but might make cheaper plans available to buyers going forward: Obamacare's regulations could be rewritten to allow insurers to sell less comprehensive plans on the exchanges. This wouldn't require doing away with every new regulation, or rolling back the pre-existing condition guarantee, which is what liberals argue the Upton bill currently being considered in the House would do. But it could involve heeding the recent hint from the University of Chicago's Harold Pollack, a card-carrying Obamacare advocate, that perhaps in the wake of the last month's developments the government should "revisit just how minimal the most minimal insurance packages should be," which in turn could open the door to allowing many more people to buy the kind of high-deductible catastrophic plans that the law currently allows insurers to only sell to twentysomethings.

These moves would not let everyone keep their existing plans, as the Upton and Landrieu bills aspire to do -- but there is really nothing that the White House can responsibly do, given the law's underlying design, that would resolve that problem. What partial deregulation would accomplish, though, is to allow some of the lower-cost plans the law abolishes to be actually revived and made available on the exchanges as "bronze" options in 2014 and 2015, rather than just temporarily grandfathered for a year or so outside them. And this would have two potential upsides for Obamacare. First, it would ease the rate shock that people with cancelled plans experience when they go shopping for new coverage on the exchanges (and in the process hedge against potential further rate increases in the new few years). And second, it would offer a carrot, in the form of cheaper options than the exchanges currently provide, to lure in some of the uninsured who might otherwise be more inclined than the White House expected to just pay the fine (or dodge it) and continue without coverage. (If you want more people to buy a product from your website, figuring out a way to lower the price is a time-tested method ...)

It would also, obviously, have a major policy downside for Democrats, because it would undercut the liberal goal of equalizing coverage as well as just expanding it, and move the system in a more conservative/libertarian direction instead. 

Posted by at November 15, 2013 12:49 PM

blog comments powered by Disqus