April 10, 2014

JAMES TARANTO: ObamaCare’s Missing 3.2 Million: A mixed verdict from the Rand Corp.

The Rand study suggests that ObamaCare’s greatest incentive effect–a function of both the mandate tax and the unattractiveness of individual plans–is to nudge employees to opt in to workplace plans. As for the incentives on employers, they go in both directions. But the law’s main disincentive for ESI–the so-called Cadillac tax on expensive plans–doesn’t take effect until 2018.

As for the individual marketplace, its viability is questionable even if the administration’s overall enrollment figures turn out not to be wildly inflated. Because of price controls–a k a the ban on considering “pre-existing conditions” and limits on accounting for age in setting premiums–the exchanges depend on enrolling a substantial proportion of young, healthy people paying inflated premiums.

Preliminary data showed early enrollments skewing much older than the administration had hoped. And while no data are collected on enrollees’ health status, a new study shows, as the New York Times reports, that “people who signed up early for insurance through the new marketplaces were more likely to be prescribed drugs to treat pain, depression and H.I.V.”

Not a good demographic to insure.

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