Comment

"Reasonable" John Boehner: "Obamacare Has to Go"

80
lostlakehiker11/21/2012 6:08:21 pm PST

re: #38 engineer cat

We shall see. If I’m wrong, I’ll admit it. The test will be whether large private insurance companies pull back from offering coverage to substantial classes of customers.

By way of analogy, suppose the federal government issued rules about insuring beachfront property that forbid them to take the prospect of global warming into account. Suppose I’m in a RW forum, arguing that it’s real and that insurers will indeed begin raising rates and withdrawing from markets.

I’d say, we shall see. I expect adverse selection effects to overwhelm the system. The mandate’s penalty is so small that it won’t drive people into coverage, but out of it. I think they’ll pay up and wait until they’re sick to sign up for coverage.

Writing rules that can be gamed is not going to end well.