Amazing words from the man who’s often described as the “architect” of the giant health-care fartburger that’s now landed on America’s plate. Contrary to popular belief, he didn’t call ObamaCare itself a “train wreck” back in the spring; his point at the time was that the law’s success depended upon convincing young, healthy, middle-class people to sign up. If HHS did that, everything would be grand. If they didn’t, it’d be a train wreck due to adverse selection: Insurers would be stuck with an influx of sick people signing up and no way to pay for it without healthy people handing over their premium money each month. The train wreck was conditional.
Six months later, he’s starting to see the train lights in the distance. What’s amazing about this clip is that Baucus, as “architect” of the law, surely understands as well as anyone that delaying the mandate would increase the risk of a wreck — and yet here he is, casually tossing the idea out there. No wonder insurers are getting fidgety:
The health care law essentially strikes a deal with insurance companies: They are required to cover people with preexisting conditions, and they can’t charge people more based on those conditions. Both of those policies will cost insurers money—potentially, a lot of it. So the law also includes three tools to minimize their financial risks: the individual mandate; subsidies to help people afford insurance; and a defined window to buy coverage.
If lawmakers start fiddling with those incentives, the equation gets worse for insurers. There are minor changes that the industry could probably weather, maybe easily. But just the idea of weakening those safeguards is enough to make insurers nervous. A handful of states tried in the 1990s to enforce guaranteed coverage, but without the safeguards that Obamacare includes for insurers. Premiums in those states skyrocketed, growing by double digits each year until they were so expensive that the reforms ended up increasing the number of uninsured people…
Although it sounds like a minor adjustment, the fact that there’s a defined open-enrollment period is a big deal for insurance companies. Extending the window would be “destabilizing” for insurers, Zirkelbach said.
Their primary goal is to cover as many people as possible who won’t file big claims. It’s the defined enrollment window, not the individual mandate, that prevents people from waiting to sign up for insurance until they’re on their way to the emergency room. So extending the window could make it easier for young, healthy people to go without insurance until they absolutely need it. “If these vital enrollment incentives were to change, the premiums health plans filed for next year would have to increase,” Zirkelbach said.
If the premiums next year increase so much that healthy people with insurance decide it’s cheaper to drop their coverage and just pay the fine instead, then voila — you’ve got your first downward turn in the fabled industry death spiral. And here’s Baucus, hinting that he might vote for a mandate delay a few months from now that would make that more likely. Even more amazing, he has nothing to gain personally from pushing delay. He announced months ago that he’s retiring at the end of this term so, unlike other red-state Dems like Pryor, Landrieu, et al, he doesn’t have to worry about being tossed out on his ear by angry voters in an anti-ObamaCare backlash. Given his role in crafting the law and his unaccountability to voters, he’s actually perfectly positioned to be the White House’s Senate point man in explaining that delay is potentially very bad and that such things shouldn’t even be spoken of until months have passed and it’s the only option left. As it is, he’s helping to mainstream the idea of delay by floating it as a possibility, which not only puts Obama in a tougher spot later but gives the GOP a foothold in arguing that the whole law should be put off so as to minimize the adverse selection problem. Mystifying. And proof, I guess, of just how toxic ObamaCare’s suddenly become. Even a guy who has no reason to distance himself from it is inching away.