‘The situation is further complicated because the basic design of these plans is intended to create major cross-subsidies between user groups, which are enforced by the guaranteed issue and non-discrimination rules that apply to all health coverages on the exchanges. Those requirements mean that it is impossible for insurance companies to deny coverage to any applicant except on very narrow grounds that relate to oversubscription. One major threat to standard insurance coverage is that the insured has more information about his or her condition than the insurer. In traditional insurance law, the insurer was therefore entitled to require full disclosure about the relevant risk in order to price the coverage appropriately, or to decline it altogether.’
What is the end game if insurers can’t properly account for risk?
Related On This Site: From The New England Journal Of Medicine Via CATO: ‘The Constitutionality of the Individual Mandate’From If-Then Knots: Health Care Is Not A Right…But Then Neither Is Property?… From The New Yorker: Atul Gawande On Health Care-”The Cost Conundrum”…Sally Pipes At Forbes: ‘A Plan That Leads Health Care To Nowhere’…Peter Suderman At The WSJ: ‘Obamacare And The Medicaid Mess’…From AEI: ‘Study: ‘Obama Healthcare Reform Raising Costs, Forcing Workers Out Of Existing Plans’
Covering the law and economics from a libertarian perspective: Richard Epstein At The Hoover Institution Journal: ‘Three Cheers for Income Inequality’…Richard Epstein At The Hoover Institution: ‘Death By Wealth Tax’