uh oh

Date: Sunday November 3^{rd 2013}

Title: Obamacare delay would send rates soaring
News source: CNN MONEY
Article date: Published: November 1, 2013: 7:02 AM ET
Author of article: Tami Luhby

Summary: Due to major technical problems having to do with Obamacare republicans and some democrats in congress want to give individuals more time to sign up for Obamacare due to difficult enrollment. However delaying Obamacare by just a few months could send insurance premiums through the roof.

Issue: Because of the delay less people will have insurance by the end of 2013 and because of this insurance premiums will have to rise in order to not lose money.

Claims:

• It's possible some insurers could appeal to state and federal regulators to increase the premiums mid-year, but there's not a lot of precedent for that, said Yevgeniy Feyman, fellow at the Manhattan Institute, a free-market think tank.
• Under the current plan, open enrollment will end March 31, allowing insurers to base their 2015 rates on the risk pool of their 2014 enrollees. If the mandate is delayed and that risk pool is made up of mostly older, unhealthy people, insurers will jack up their premiums.

 

Argument: It’s fair to give people extra time due to technical issues vs. this will hurt the people who were able to sign up and who sign up later on.

Supporting evidence:

• “Insurers set their rates for 2014 assuming that all Americans would be subject to the individual mandate, which requires them to get health insurance or face penalties.”
• Under the Affordable Care Act, insurers must provide coverage to everyone -- even the sickest people -- which would greatly increase insurers' risk and cost.
• if the mandate were delayed by a year, many of those lower-cost folks may not sign up. About 2 million fewer people would would obtain coverage in the individual market, according to the Congressional Budget Office.

 

Analysis: This is a tough one. I think it’s really not fair to punish people for not being able to do something do to a technical issue. It’s bad to punish someone for something that is not their fault. I also don’t feel too bad for insurance companies. Because they were using young couples use of their plans to their own benefit anyway. They were being sneaky. I do feel bad for those who will be affected by the rise if it does happen because it’s also not their fault that the younger people were delayed signing up.

Relate to economic concepts: If people are spending more money on insurance they will likely but less money into the economy. That's not good.