Final Word on Obamacare: Cheaper than Expected

[Linus Van Pelt]

Torie, is it your interpretation of the law that it actually is still legal, after all, to sell a health insurance policy that discriminates in price based on pre-existing conditions, so long as it is not sold on the state-managed exchanges? Surely that would be ridiculous, and undermine the arrangement more directly than through "gap insurance". One could just sell regular old annual insurance to healthy young people at a lower premium than is available on the exchange, and then they wouldn't be in the pool. Now, I haven't read the whole bill of course, but nothing I have read suggests that that is what the law is. Do you have any evidence in favor of this theory?

But if, as everything I have read suggests, it is illegal to discriminate in price based on pre-existing conditions for any health insurance policy, regardless of what web site it is sold through, why wouldn't people with pre-existing conditions likewise buy this "gap insurance", given that it was cheaper, thus forcing the insurer to raise the price to stay profitable, like in the exchange?

[Linus Van Pelt]

In fairness, there is a system like this set up for travel health insurance. The NHS isn't going to cover health care in the US, so a British person traveling here can buy, say, a two-week policy from Lloyd's or whatever, who then will reimburse an American hospital if they get in an accident. I used to buy such policies from Canadian insurers when I traveled abroad, before moving here. I never had to use them, so I don't know how exactly the process works, but somehow they figure out a way to get money from a foreign insurer to an American hospital without the tourist having to hand over thousands of dollars.

But I don't really know what the point of this side-discussion is in this context. If a product is legal in the US, an American company can sell it, and if it isn't, a seller located in a foreign country doesn't make it so. "No, your honor, the cocaine doesn't come from the Wisconsin regulated pharmaceutical market, I bought it direct from Escobar's of Medellin..."

[Linus Van Pelt]

There will be a lot of people without foresight and wisdom or even knowledge of the new requirement.

Yeah, I think there is a real worry about people not getting health insurance simply because they don't understand the system and the timelines. I suspect this will be a bigger issue than people who understand the system trying to game it.

This thread illustrates just how complicated the system is: even a group of people who follow politics very actively is having a hard time figuring out just what all the parts of the arrangement are. Polls show that large numbers of Americans find the law confusing, and the population being asked to navigate it is disproportionately lower-income and less well-educated. It is a disadvantage of Obamacare, relative to a more genuinely universal public system.

[Linus Van Pelt]

This is maybe not so great.