Boehner Asks: “Why A Break for Businesses Only?”

 That House Speaker John Boehner would ask this question shows either:

a)    how little he understands about the Affordable Care Act; OR

b)    how committed he is to making sure that the American public  does not understand the purpose of health care reform.

I would pick “b”.

Republicans are now suggesting that if the employer mandate (requiring that businesses offer benefits to their workers or pay a penalty) is being postponed until 2015, the Obama administration should postpone the individual mandate as well.

“Is it fair for the president of the United States to give American businesses an exemption from his health care law’s mandates without giving the same exemption to the rest of America?” Boehner asks.

What he ignores, of course is that under the Affordable Care Act, .middle-income as well as low-income citizens would receive generous tax credits to help them purchase insurance. Not long ago, I wrote about those subsidies, and a new “subsidy calculator” that will let an individual estimate how large his subsidy would be).

More than 26 million Americans will be eligible for these tax credits next year–though most dont know it. And by attempting to delay the individual mandate, the GOP is trying to make sure that they don’t find out.

       The Individual Mandate and the Employer Mandate Are Not Connected

Meanwhile Boehner pretends that the two mandates are somehow connected, In fact, they have nothing to do with each other. 

 The individual mandate exists because, under Obamacare, insurers are required to cover people suffering from pre-existing conditions. Aetna will no longer be able to shun the sick, nor will it be able to slap them with sky-high premiums.

This part of the law is extremely popular. Most Americans understand that any one of us could be diagnosed with cancer tomorrow. The goal of the law is to protect all of us against the vicissitudes of fate by ensuring that we have access to affordable insurance.

But if there were no individual mandate requiring that we all purchase insurance (or pay a penalty), a great many people would wait until they became ill, and only then buy insurance.As a result the insurance pool would be filled with folks who need expensive care, and everyone’s premiums would spiral.

If we want to insist that insurers cover the sick, we also must insist that everyone join the insurance pool. We all share in the risk of becoming sick, and so all must share in the cost. Ultimately, insurance is all about “pooling the risk.”

(Those who believe that they shouldn’t have to join the pool because they are young or  because they don’t smoke, exercise regularly and generally “take care of themselves” are ignoring the most basic fact about the human condition:  “all flesh is grass”. )

The requirement that insurers must cover a 30-year-old suffering from MS cannot be separated from the individual mandate. We cannot have one without the other. The architects of health care reform understood the connection

By contrast, the employer mandate has little to do with the individual mandate. The phrases sound alike, that’s about it. The individual mandate and the employer mandate do not depend on each other.

If some employers decide that they will wait until 2015 before offering comprehensive, affordable health benefits, their employees will be eligible for subsidies to help them purchase their own coverage.  Postponing the employer mandate in no way affects their ability to obtain coverage at a cost they can afford. Alternatively, if an individual decides not to purchase insurance, next year, he will be asked to pay a penalty of just $95.

This is what Fox News calls “a hefty fine.”


26 thoughts on “Boehner Asks: “Why A Break for Businesses Only?”

  1. Maggie –

    As much as I would like to see as many people as possible get health insurance for a reasonable cost and though I’m comfortable with subsidies conceptually, I am deeply troubled by the Obama administration’s decision to excuse the exchanges from verifying an applicant’s income. People applying for Medicaid need to prove eligibility based on income and assets, those who need Supplemental Security Income need to prove that they qualify and students and their families applying to colleges for financial aid need to complete comprehensive income and asset disclosure forms and provide copies of tax returns. Telling people who want health insurance subsidies that all they need to do is attest to their income exposes taxpayers to the possibility of massive fraud. Remember liar loans for home mortgages?

    As for the individual mandate, young healthy people will be able to opt out by paying a relatively piddling fine. If they get sick later or become pregnant, they can take advantage of the guaranteed issue provision and sign up for insurance then. Even a cancer diagnosis doesn’t generate large bills on day one. There would be plenty of time to sign up for insurance and the same is certainly true for pregnancy. I predict that because the fine is so low, large numbers of young healthy people will pay it and wait until they’re sick to buy insurance. This is why, if you don’t buy insurance when you first become eligible for it in 2014, we need to use annual open enrollment periods like Medicare does unless you can meet an exception test like losing employer coverage, coverage under a spouse’s plan or aging out of coverage under a parent’s plan.

    Since the exchanges will not have the technology in place to verify income and cross check eligibility against various government databases, a one year delay for implementing the mandate is in order, I think. In the meantime, more money could be made available to fund the high risk pools for an extra year.

  2. Barry–

    First, see Media Matters: “Right Wing Media Misleadn on Obamacare eligibility Verification”

    The Washington Post counters the wild allegations made by “Fox & Friends” noting that that t”his system will not last a decade, and includes safeguards against fraud.
    The full verification system is only delayed until 2015, That’s ONE YEAR.
    “and until then the government will conduct an audit of a statistically significant sample of consumers who appear to be underreporting their income. Anyone found lying will face a penalty of as much as $25,000, and be forced to pay back the extra subsidies. The Post also noted that this honor system for health care reflects the one used by the Internal Revenue Service”

    A $25,000 fine is a pretty stiff deterrent.
    Media Matters quotes law professor Timothy Jost, who is both a health reform expert and a constitutional scholar:
    “It is not unprecedented for the government to use the honor system in situations in which it collects data on millions of individuals. . . For example, people are expected to report their cash tips to the Internal Revenue Service as income.

    “An awful lot of the economy is a cash economy,” he said. “If we had to verify every statement that was made to the IRS, our economy would collapse.”

    Barry: That’s the point. It wouldl cost WAY TOO MUCH
    to try to verify every income statement that the IRS receives.

    This is why the government conducts spot checks and audits.

    And Barry when you suggest that if a young person gets sick or becomes pregnant her or she can then sign up for insurance, I’m afraid that once again you have been mislead by conseravtive and libertarian organizations who just don’t mind lying.
    The fact is that if someone opts out of insurance and then gets sick He will have to Wait until the Next Open Enrollment Period before enrolling for insurance. That could be a year away.

    Barry, when you hear these claims from organizations that you know oppose Obamacare (“massive fraud” etc.)
    I really wish you would “google” and check the facts before repeating the misinformation.

    Healthcare.gove has a new website that is very good.
    Kaiser FAmily Foundation’s issue briefs also are excellent. (Not related to Kaiser Permanente the insurer)
    And they are accurate.
    Finally since the vast majority of young people who are now uninsured will be eligible for generous subsidies,
    it is most likely that they will enroll in 2014 and 2015-
    though organizations like Cato (not to mention the Republican party) are doing their best to try to persuade them that liberals are exaggerating the subsidies.

    And Barry– would you really like to see the individual mandate and subsidies delayed for a year? How many people do you think would die or be crippled due to lack of healthcare during that year? How many women wouldn’t get proper pre-natal care? How many teen-agers wouldn’t be able to afford contraception (which will be
    free under the ACA) and become pregnant?

  3. The IRS is actually quite good at matching up documents like W-2 and 1099 forms. What they are not good at is finding out about income for which no documents are produced like cash tips, profits earned by small business owners, rental income, and, until very recently, capital gains income.

    I don’t see why people applying for subsidies can’t produce a document from their employer that says the employer does not offer health insurance or the employee is not eligible for it or he is eligible for it but it’s not affordable. Just because penalties for larger employers who don’t offer health insurance will be delayed for a year doesn’t mean that those same employers can’t produce simple documentation that states whether or not their employees have access to affordable health insurance as well as what their salary or hourly wage is and what they have earned year-to-date as of when a subsidy is applied for.

    I don’t mind paying taxes, within reason, to support worthwhile social programs but I, along with many others, resent financing payments to cheaters and people who game the system. Liberals, by contrast, seem to have the attitude of when in doubt, put the money out and fraud is acceptable collateral damage as long as a larger purpose is served. I don’t expect fraud to be zero, but this honor system approach has disaster written all over it.

    Finally, I don’t get your problem with open enrollment periods when Medicare has used it for years. There are plenty of people who miss signing up for Part B benefits in time and have to wait for the next annual open enrollment period. It’s a reasonable approach.

    If you want to ensure that more people sign up for insurance, then make the penalty a lot stiffer. In my opinion, it should be closer to 90% of the cost of a bronze level plan for a young person.

    • Barry–

      Addressing your last comment first:

      I have no problem with open enrollment periods.

      As I esplained under the ACA, people who decide not to buy insurance will have to wait for an
      “open enrollment period.” They will not be able to
      sign up for insurance when they become sici.

      ReL the penalty for individuals who don’t buy insuance.

      I, too, believe that the penalty should be higher than $95 in 2014.
      (In the past, I have written about this) Do a “Search” on HealthBeat and you will find the post(s)

      But do you realize that when Democrats pushed for a higher penalty, Republicans
      made it very clear that if the penalty were significantly higher, they would vote
      against health care reform?

      Barry- let me suggest that you watch C-Span tapes from the past that will show how
      Republicans objected to higher penalties.

  4. The Republican stance on the penalty was unfortunate, especially since the individual mandate was originally a Republican idea.

    I’m glad to learn that the ACA does indeed provide for an annual open enrollment period with exceptions for so-called triggering events. Somehow, that provision previously escaped my notice.

    I do still think, though, that the number of young healthy people who will opt to pay the penalty rather than buy insurance will be higher than many people expect. We’ll have to wait and see how it plays out.

  5. I think that the widespread use of the term “employer mandate” on all sides is unfortunate.

    The term creates the image that all employers will be forced to offer and pay for health insurance for their employees.

    This makes left wingers will good, and makes right wingers very angry.

    What the ACA actually contains is a play or pay provision on a subset of medium to large employers (over 50 full time equivalents).

    This is not a mandate. It is much closer to a targeted tax, which hoped to incentivize more workplace insurance.

    The employer section of the ACA was riddled with loopholes. I have no idea if this was due to the pressure of lobbyists when the bill was drafted, or due to the drafters being tone-deaf to how low wage businesses really operate.
    (based on comments by Jonathan Gruber, I would not discount the latter excuse.)

    Anyways, Maggie is right that delaying the ‘not-really-a-mandate’ may not be crucial.

    Of course in my mind the real right answer would have been the expansion of Medicare to low wage persons of all ages –
    paid for by taxes on the affluent.

    (Either that, or federalize Medicaid, which Greg Anrig has been suggesting for years.)

  6. Bob–

    Given the fact that $1 out of $3 Medicare dollars are wasted on unnecessary treatments and over-priced products and services, expanding it would mean expanding the waste.

    (We have more than 25 years of research demonstrating the waste in Medicare.) I’ve written about it here

    The problem is that Congress has played a major role in deciding what Medicare covers, and the
    Committee that sets Medicare fees for doctors is
    run by specialists who, no surprise, have continued to hike specialists’ fees.

    This committee operates behind closed doors.

    I’ve written about it here.

    Under the ACA Medicare & HHS have more power to go around Congress, and Medicare is getting a little tougher. Recently it refused to start covering an Alzheimer’s drug because we have no evidence it works. Can you imagine Congress voting not to cover an Alzheimer’s drug?

    Over the next four or five years Medicare may well cut a fair amount of the waste. I’m quite certain that it will crack down on drug prices. And it’s already pushing hospitals to become more efficient.

    But we definitely don’t want to expand the current Medicare system until we squeeze at least half of the waste..

  7. I tend to promote Medicare because it is the closest thing we have to pure social insurance, especially Part A.

    Everyone in the work force contributes, progressively, and everyone over 65 benefits, regardless of how much or how little they themselves contributed.

    That is a principle I do not want to lose sight of.

  8. Bob–

    The fact that Medicare is funded by a progressive tax is fine.

    The fact that lobbyists control how the money is spent–and that we waste 1/3 of it– isn’t.

    Moreover, Medicare is not comprehensive insurance.
    It does not cover a great many things that people need such as eye exams. (It covers exams if you have a disease, but how do you find out you have a disease unless you have eye exams?)

    Hearing aids, hearing exams and routine foot and dental care are not covered.

    If you need skilled care immediately after leaving a hospital, Medicare will pay the full Medicare-allowed rate for the first 20 days you require skilled nursing or rehabilitation care. After that, you pay a part of the cost ($141.50 per day) for up to 100 days. Medicare doesn’t provide skilled nursing or rehabilitation coverage for services that exceed 100 days in a row.

    And, of course, Medicare doesn’t cover long-term care. If you suffer from Alzheimer’s, you first have to spend down your savings, then go on Medicaid.

    This is why 90% of seniors are forced to buy supplemental coverage. The 10% who can’t afford it are out of luck.

    Under Medicare co-pays have risen to a point that some seniors cannot afford to use Medicare.

    We could make Medicare comprehensive– IF we took the decision-making power away from Congress (i.e. away from the lobbyists) and gave it to health experts, medical reserachers and physicians.

    But that is not likely to happen. Given the fact that our political campaigns are so much more expensive than in any other developed country, much of Congress will continue to be “owned” by lobbyists.

    This is one reason why a health care system totally run by the govt would be a bad idea. It would be a health care system totally run by a money-driven health care industry.

  9. Maggie,
    Good points indeed!
    I really laugh at the notion of ‘waiting until sick’, before purchasing insurance.
    On Thursday night, a 20-something year old (uninsured) had a severe motorcycle accident near our hospital and was heroically saved after 5 surgeries (including an amputation) and extreme intensive care. I have no idea what the bill is….so far, but probably in the 100’s of thousands. His assets are toast and bankruptcy is certain.
    In retrospect, we can conclude:
    1. If conscious, get that insurance *before* you reach the hospital.
    2. If unconscious, make sure someone else can obtain coverage *in a few minutes*…..before the real expensive stuff is implemented.
    /sarc off

    The arrogance of healthy (and especially young) folks who assume they will get a chance to obtain coverage if and when TSHTF is beyond mind numbing. Understanding risk is not a strong suit of our species.


    • Ruth–

      Not only will be bankrupt , but very likely the hopsital will continue to come after him,
      attempting to garnish his wages etc. until they come to some sort of settlement.

      Even worse, now that he has survived, presumably he still needs rehab.

      But once the hospital has “stabilized him” under the law they have no obligation to
      provide rehab unless he can cover the cost.

      People just don’t realize that if they don’t have insurance, it’s very likely that they won’t get the care they need.

  10. The subject of this story perceived himself as young and healthy and didn’t need to buy health insurance. He turned out to be wrong and will suffer the consequences of being wrong. The problem is that only a very tiny percentage of young, healthy people will be involved in a serious accident or receive a cancer diagnosis. If they don’t buy health insurance because they perceive that they don’t need it and don’t want to spend the money for it, the overwhelming majority will win that gamble.

    Similarly, lots of people cheat on their taxes mostly by not reporting or under reporting income. While the IRS audits between one and two million tax returns each year, very few cheaters get caught and many of those who do don’t suffer serious consequences. I expect lots of people to lie about their income next year to maximize the subsidy they can get to buy health insurance on one of the exchanges. While sampling of a small percentage of these returns will take place, the vast majority of cheaters will get away with it and taxpayers will get stuck with the bill. In this context, people are pretty good at cost-benefit analysis at the population level. They know that a few will get caught but they’re confident it won’t be them. So it goes.

  11. Barry–

    If you corporate tax fraud, bank money-landuering, and the amount that tax preparers’ steal from all of us while preparing returns for very wealthy people, to the amount that someone may steal by claiming to earn $35,000 when they really earn $55,000 is very small indeed.

    The fine for lying about your income to the Exchanges is very high—high enough to be a deterrent.

    As for young people buying insurance, after subsidies some will be able to buy a Bronze plan for $0. That’s right, insurance will cost them nothing, and they will get free preventive care.

    Then in a couple of years, (probably when planning a family) they’ll move up to a silver or premium plan. Once they have children, they won’t want a Bronze plan because it pays only 60% of medical expenses, and with children come many regular medical expenses.

    The folks who say young people won’t sign up are saying this for ideological reasons–because they don’t want them to sign up.
    They want Obamacare to fail because they hate Obama. And they could care less whether low income and middle-income Americans get the care they need.

    • Barry–
      I should add that I don’t think you Want Obamacare to fail.
      But I don’t know why you listen to the people who do.

  12. A bit off-topic, but the ACA is a large, complicated project. We should not expect it to work as planned right out of the gate; it will require constant tweaks, large and small. I don’t understand people who insist that, if everything doesn’t work just as projected, the ACA is a failure. To me those are not people trying to solve the problem of providing affordable healthcare to as many people as possible. My preference would have been to provide healthcare, not health insurance, since they are not the same thing. Still, we need to launch the ACA and expect to modify it as events indicate.

    It reminds me of those on the Left, commonly called Firebaggers, who insist that since Obama has not produced everything they want, he and his presidency are abject failures.

    • Chris–

      Exactly. A project this big will need constant tweaks as we work it out.
      People who insist that if everything doesn’t work instantly, the ACA is a failure want it to fail.
      This has less to do with the ACA than with Obama. So much hate–it’s really distrubing.

      The Firebaggers also are unreasonable extremist. And in some cases, they too hate Obama.

      And they just don’t care if the ACA is going to make life better for a great many people. It’s “my way or the highway.”

      Finally, I’m not sure what you mean when you say that you would have preferred that we provide “health care rather than health insurance”?

      We can’t have universal healthcare without health insurance “pooling” the risks and the costs.

      Perhaps you are saying that you woudl rather see us funding universal health care through a progressive tax that would be paid to
      the governement, and then the govt pay doctors and hospitals directly

      Unfortunately, there are so many problems with our Congress that I wouldn’t trust it to do a good job of running a universal health care system.

      Kaiser does a much better job that our govt does with Medicare . . .

      And since we never know who the Ameircan people might elect to the White House tomorrow, I would like always to have alternatives to
      govt-run healthcare (preferably non-profits.)

  13. “As for young people buying insurance, after subsidies some will be able to buy a Bronze plan for $0. That’s right, insurance will cost them nothing, and they will get free preventive care.”

    I don’t know where you get this. According to the Kaiser Family Foundation subsidy calculator, the cost of an unsubsidized premium for a 30 year old non-smoker will be $3,426 per year or $285.50 per month on average in 2014. A young person will a (claimed) annual income of $20K will have to pay 5.11% of income toward health insurance and will qualify for a subsidy of $2,404. At $25K of income, the subsidy drops to $1,697 while the percentage of income requirement rises to 6.92%. At $30K, the subsidy falls to $914 and the individual’s share goes up to 8.37% of income. For those with income above 300% of the FPL, they must pay 9.5% of income for health insurance before subsidies kick in.

    Separately, failure to verify income and to just accept an individual’s or family’s word for it is an invitation to fraud pure and simple. Very few people will be caught by any sampling and most of those that are won’t be able to pay the fine, will be unlikely to be sent to jail and will at most wind up with a slap on the wrist in my opinion and maybe have their insurance revoked.

  14. Barry–

    Go to the Kaiser calculator.
    Enter 2 adults, 25 years old, 0 children, and $22,000 income. (Maybe the husband lost his job and only the wife works. Or they may both be going ot school while also working in a restaurant chain)
    Their income is low, but not low enough to qualify for Medicaid.

    Click “submit”

    Scroll down to “Bronze Plan”
    You will see they owe $0 in premiums. For that, they will get free preventive care,free contraception and a cap on out-of-pocket costs if they wind up in an accident.

    Now that rates have been announced “Cover California”
    points out that the average Bronze plan for a 21 year old is $177 without subsidies, but can be as low as $5 a month with subsidies. For $5 a month he gets free prevenetive care and 3 doctor’s visits a year for just $60 (the decutible does not apply to those 3 visits.)
    That’s $60 a year.
    In Oregon, the least expensive Bronze plan is $1590.
    Note a 25-year old earning $23,000 would be eligible for a subsidy of $1,580—6.31% of his income—apply that and the cheapet Bronze plan costs $10 a year.

  15. Some of the proposed deals on the exchanges look very good. Will this cannibalize the existing market for individual…and eventually group policies? This is a confusing issue.


  16. Ruth–

    Good to hear from you.

    I don’t think this will “cannabilize” the existing market for individual and group policies.

    But the existing market for individual polices will probably disappear,

    It is unnecessarily expensive because:

    a) hand-sellling policies to individuals creates very high administrative and marketing costs and

    b) individuals have no leverage and thus no power to bring rates down.

    The existing market for small groups also is needlessly expensive–for the same reasons.

    Today, both individuals and small groups pay far more than they should for health insurance.
    For-profit insurers often rip them off.

    Today, the New York Times reported that rates have been finalized for New York State. On average, individuals who buy their own insurance will be paying 50% less.

    Under Obamacare, small businesses also will see lower rates.

    Under reform, non-profit insurers will be the major players in the Exchanges and the best are very, very good.

    • Maggie,

      Appreciate the comments.

      I hear much talk about ‘rates’, but very little about plan benefits, e.g., does a gold plan on an exchange offer the same benefits as a current, comprehensive individual policy? Are we comparing apples with apples?
      I have a friend at at major hospital in LA, who tells me that they may not be accepting any patients with exchange plans, since they are ‘cut-rate’ re: reimbursements.
      There is a lot of static in the system and the naysayers are pressing hard.

      • Ruth-

        Yes, the benefits in gold, plantinum, bronze and silver plans are the same. Same essential benfits. Same preventive care with no copays or deductibles. No cap on payouts over a year or a lifetime. But there is a cap on out of pocket spending.

        The Only significant difference is that the more expensive platinum plana has lower co-pays and deductibles (may have a 0 deductible)
        while a Bronze plan has higher co-pays and deductible but lower premiums. Bronze makes sense for someone who expects to go to the doctor once or twice a year (and pay $60 out of pocket each time.) With a subsidy his premium might be $500 a year –or less. And his out-of-pocket spending also will be subsidized.

        Your friends hosptial CANNOT refuse to accept Exchange insurancce. I am afraid that this is another Myth (Lie) being spread by conservatives. However an Exchange insurance plan can refuse to include a particular hospital in its network. For instance, Cedars Sinai
        in L.A. is a very expensive hospital that receives relatively low ratings for quality of patient care and patient satisfaction.
        For that reasons, some plans wont include it.

        Kaiser Permanente, on the other hand, receives the highest marks for quality in both Northern and Southern California. That’s why it’s the most popular insurer in California. It will be in most of the networks.

        You are right that the naysayers are pressing hard. They really don’t mind lying. That’s why I’m glad to have some real numbers.

        I’ll continue to write more posts using those numbers.

  17. Maggie –

    The same NYT article you referred to also noted that a mere 17,000 people currently purchase health insurance in New York State’s individual health insurance market because the premiums are off the charts expensive. NY is the poster child for what happens when regulators require health insurers to offer insurance on a guaranteed issue basis but don’t mandate that people buy coverage. Only sick people who really need health insurance and can scrape together the money for the premium will buy it.

    I have no idea what percentage of purchasers on the exchanges insurers expect to be comparatively healthy. For the carriers, this is the biggest risk and uncertainty. As I understand it, the rules around risk adjustment, risk corridors and reinsurance have still not been finalized. These rules are intended to ensure that carriers who wind up with a disproportionate number of relatively sick people are compensated with additional revenue.

    We’ve seen in the past that insurers sometimes make mistakes in structuring and pricing certain plans in certain markets for the Medicare Advantage population. When that happens, the plan either isn’t offered the following year or the coverage is restructured or the premium increases significantly. There will be a learning curve to get through as the ACA is implemented. That’s for sure.

  18. Barry–

    As the New York Times pointed out yesterday, under the Affordable Care Act, rates in NY will be about 50% lower , on average, than a New Yorker would pay for comparable insurance today.

    (Yes there is “junk insurance” out there that is cheaper–policies that are filled with holes– but they’re really not worth the paper they are printed on. You don’t find out about the holes until you get sick. And the deductible and co-insuranced may mean that you can’t afford to use the policy.)

    I have lived in NY for more than 20 years and have always liked the fact that people who are older than I am or sicker than I am don’t have to pay more for insurance.

    During that time, I’ve been self-employed for many years (writing books, etc.) and bought my own insurance. During those years I was “middle-income” but still managed to buy very good insurance (0 deductible, reasonable co-pays, comprehensive coverage, no cap on how much it pays out.)
    It is expensive, but if you’re over 40 it’s well worth it. If you’re healthy and under 40, you can buy something with a much higher deductible that will be affordable.
    Also see this article on Bloomberg today: “Insurance Premiums Seen Lower Than Forecast on Health Law”
    It’s turning out that everythign that conservatives have been saying about how expensive insurance will be under the ACA is wrong.
    Finally, about 60% of young men 18-34 who now buy their own insurance will be eligible for subsidies or Medicaid. We can expect to see them in the pool next year. And the vast majority of them are pretty healthy.

  19. As Julie Rovner said on NPR tonite, both sides are doing a little cherry picking when they talk about ACA rates. The rates are clearly lower in the 5-7 states that have had community rating for years. (Sorry Dems) The rates are clearly higher in the states which allowed insurers to do full underwriting. ( Sorry Repubs)

    Let me make two comments:

    1. It is one more scandal that risk adjustment has not been settled. (or even explored very much)

    I have made some study of German and Danish and Swiss systems that use multiple insurers but allow no underwriting.

    Risk adjustment is perhaps the MOST important fiscal element of the system. In Denmark over 50% of the premiums flow into the risk adjustment fund, and they still tinker with it every year.

    2. This is a connected comment. I want the ACA to succeed and I am encouraged if premiums are modest this year.

    But the acid test is what will premiums be in the second year. For obvious reasons actuarially.

  20. Bob–

    Six weeks ago, those who opposed Obamacare claimed that in 2014, premiums would be unaffordable.

    Now, they are saying that a year later (in 2015) , premiusm will rise, and that will be the “acid test.”

    They just don’t’ seem able to accept the fact that they are — and have been –wrong.

    Under Obamacare, Americans will be able to get much better value for thier healthcare dollars (comprehensive indsurance for far less) for the reasons I have explained in the pastl.