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Health Team

Professor: Reviving old policies jeopardizes health exchanges

Posted November 18, 2013

— President Barack Obama's decision to allow people to stick with health plans that don't meet the minimum requirements of the Affordable Care Act for at least one year could throw the online health exchanges off-kilter, according to a Duke University professor.

Obama last week granted a one-year exemption for such plans after an outcry from people who said their health coverage was being canceled despite the president's repeated assurances that people who liked their health insurance would be able to keep it under the new health care law.

The cancellations would have affected more than 473,000 people in North Carolina, state Insurance Commissioner Wayne Goodwin said.

Donald Taylor, an associate professor at Duke's Sanford School of Public Policy, said Monday that the insurance market might be better off in the long run if all of those health policies were canceled.

“The development of people potentially being able to keep their old individual policies, if that somehow all people who decided to do that happened to be healthy people, that could cause problems for North Carolina’s federal exchange market,” Taylor said.

The online exchange, like all insurance markets, needs a balance of good, medium and bad risks to spread costs around and stabilize premiums, he said. Pulling some of the potential healthy enrollees from the exchange would tip the balance toward the unhealthy end, leading to higher premiums, he said.

"We don’t know that’s going to happen, but in the end, that’s the biggest worry," he said. "In one sense, renew-for-one-year deals with the short-term political problem, but it could put the long-term health of the exchange in jeopardy."

HealthCare.gov website Online exchanges need healthy enrollees to balance costs, premiums

Kristin Perry and her family could provide four healthy people for the exchange if they choose to buy coverage there.

Perry said Blue Cross Blue Shield of North Carolina canceled her plan, and a comparable plan would almost double in price next year – the monthly premium will increase from $550 to $900. She would qualify for a federal subsidy to pay for part of her premium if she buys coverage through the exchange, so she plans to shop around.

"Our policy is totally changing from what we have to what it's going to to meet the mandate," she said. "(Whether to keep our current coverage) is a hard decision, not knowing what else opens."

Taylor said losing too many families like Perry's could mean higher premiums on exchange plans beyond 2015 as Blue Cross and Coventry Health Care of the Carolinas struggle to balance costs.

"If you have a consequential piece of public policy, no way it's not going to create winners and losers," he said.

8 Comments

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  • davidgnews Nov 26, 3:05 p.m.

    " if that somehow all people who decided to do that happened to be healthy people, that could cause problems for North Carolina’s federal exchange market"

    That's exactly my case, and I'd do anything I could to hold them up.

    Just because others aren't as healthy at the same age should NOT be my problem nor expense. I should be getting a lot of credit from them to not be running up 'overhead.'

    What a scheme.

  • mep Nov 21, 9:15 a.m.

    A quote from the liberal Time Magazine regarding Obamacare: How could a White House appear so confident and incompetent at the same time? What is left of Obama's second term if it is consumed by fixing an unpopular policy from the first? LOL!

  • granville93 Nov 20, 3:36 p.m.

    We all boo hoo and forget when the elections come....Obama is a prime example of this...we get the kind of government that we deserve.

  • superman Nov 19, 3:50 p.m.

    Our new policy is about $600 and another $600 for my wife. It is only 65% coverage and each one has a $5K deductibe. That is hardly affordable. When people mention their rate that also need to be aware of the per cent of covrage and their deductible. All three are very important.

  • foodstamptrader Nov 19, 3:26 p.m.

    "If you have a consequential piece of public policy, no way it's not going to create winners and losers," he said."

    But, why make the losers the folks like me that are already providing our own affordable health insurance?

    Why cause us to become uninsured and ruin our coverage?

    If the plan is to get everyone insured, why would you want to trash the folks that are ALREADY insured affordably?

    I know you all want to pander to the subsidized class but is it worth throwing the rest of us under the bus?

  • skeeter II Nov 19, 2:41 p.m.

    Those that had a policy that qualifies get a one year extension. To be fair, should not those that had not policy also be given a one year extension?

  • Maxxx Nov 19, 12:34 p.m.

    I am a Robot... Beeeeeeppppp beeep Booooooop Bot! I must do what the government says because it knows best. I have been brainwashed by the liberal media to believe that Obama cares about the people. as long as the governmetn supports me I shall not question them. (read in a robot voice)

  • rednek Nov 18, 7:50 p.m.

    But this Obamination called Obamacare is forcing people to buy things not needed or wanted and putting a penalty on them if they don't. Kind of sounds like socialism to me. USA is a Republic, but fast going socialistic. Congress already acts like the 1960's rulers in the USSR, passing laws for the population to obey and exempting themselves from them. IMHO it is treasonous to do that, laws passed by congress SHOULD have to be obeyed by ALL citizens of the USA, NO ONE citizen should be any better than anyone else.