After one year, ObamaCare's biggest achievement is hiding its cost

As the editors of The Wall Street Journal patiently explained this week, the slightly lower premiums and higher number of insurers are the logical result of a system that’s easy to game. Here’s what the Obamacare optimists leave out: insurance companies offering coverage through the exchanges are temporarily protected from significant financial losses thanks to Obamacare’s reinsurance and risk corridor programs, which means new entrants to the exchanges have nothing to lose by underpricing their plans and hoping for the best. Because the second cheapest “silver” tier plans are used as a benchmark to determine subsidies, and because in year one these low-cost benchmark plans sold far better than any others, insurers have an incentive to undercut competitors and grab the benchmark slot for year two.

In a normal market, new entrants would naturally try to undercut existing plans to be competitive. At first glance that seems like what’s happening. After all, in an analysis of 2015 exchange rates in 16 major cities, 12 insurers that had benchmark plans in 2014 have either been undercut by new entrants or raised their rates (and in some cases, both). But this isn’t a normal market, and what’s happening isn’t healthy competition. New insurers are most likely underpricing their plans, knowing that the reinsurance and risk corridor programs will shield them from losses until, 2017 after which the programs expire and we get to find out how much these plans really cost.