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Tuesday, September 14, 2010

More consequences of ObamaCare

Any actuary could tell you the likely consequences of a bill like ObamaCare. Here, the nonpartisan American Academy of Actuaries describes the consequences of the design of one of its features, the guaranteed issue requirement (with no underwriting) for children under 19.

A non-actuary could probably tell you that allowing the purchase of a policy at any time gives a strong incentive to wait until a child is sick to buy coverage. But this letter describes many more likely consequences. For example, for any company with group health insurance where the rates they pay are based on their own experience, there is a logical economic incentive to pay an employee with a sick child to not cover the child through the group insurance, but rather through the guaranteed issue individual insurance.

Yes, like most of Obamacare, it's designed in such a way that increased costs are all but guaranteed. And don't be surprised if, several years down the road, these cost increases are used by Democrats as justification for a total government takeover of health care.

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