Monday, April 05, 2010

A Question of Timing

Shortly after the healthcare bill’s passage, I made some comments about the weirdness of the timing. Specifically, I noted (following Bryan Caplan and David Henderson) that guaranteed issue appears to kick in three years before the individual mandate – which, if true, would set in motion a rather severe adverse selection problem.

But now I’m not sure that’s the timing after all. If you check out the official timeline, the first thing that’s supposed to happen, in 2010, is:
Immediate Access to Insurance for Uninsured Individuals with a Pre-Existing Condition. Provides eligible individuals access to coverage that does not impose any coverage exclusions for pre-existing health conditions.
I took that to mean that guaranteed-issue would take effect immediately. But a couple of items below, the timeline includes a separate item, also in 2010, for “Eliminating Pre-Existing Condition Exclusions for Children.” And only in 2014 do we finally see something that sounds like guaranteed-issue for adults: “strong health insurance reforms that prohibit insurance companies from engaging in discriminatory practices that enable them to refuse to sell or renew policies due to an individual’s health status.”

So it appears that guaranteed-issue and the individual mandate might be coordinated after all. But if so, then does anyone know what the quoted passage above is referring to? One of the subsidies? A high-risk insurance pool? Anyone know?

Incidentally, I think some form of adverse selection will happen anyway, because I doubt that the individual mandate will be that effective in assuring compliance. But if the timing is right, the adverse selection won't be as severe.

No comments: