Originally Posted By: FecalFace
Originally Posted By: GDaddy
I want to pay for my own risk profiles, not for anyone else's. You should, too.

If you are semi-healthy, you are paying for somebody else, whether you like it or not.

That's how insurance works and single payer is no different.

That's exactly the problem - the insurance carriers have increasingly been prohibited - by our government - from operating their health insurance programs in the same manner that they operate their other lines - like car insurance or building insurance - where the risk pools are separated by their respective risk profiles.


What is adverse selection?
Adverse selection describes a situation in which an insurer (or an insurance market as a whole) attracts a disproportionate share of unhealthy individuals. It occurs because individuals with greater health care needs, when given the opportunity, are more likely to purchase health
insurance and to purchase health insurance with richer benefits than individuals with fewer health care needs.

Why is adverse selection a problem?
Adverse selection increases premiums for everyone in a health insurance plan or market because it results in a pool of enrollees with higher-than-average health care costs. Adverse selection is a byproduct of a voluntary health insurance market in which people can choose whether and when to purchase insurance coverage, depending in part on how their anticipated health care needs compare with the insurance premium charged.

The higher premiums that result from adverse selection, in turn, may lead to more healthy individuals opting out of coverage, which would result in even higher premiums. This process typically is referred to as a premium spiral. Avoiding such spirals requires minimizing adverse selection and instead attracting a broad base of healthy individuals, over which the costs of sick individuals can be spread. Attracting younger adults and healthier people of all ages ultimately will help keep premiums more affordable and stable for all members in the risk pool.

What if some plans were allowed to avoid ACA rules altogether?
If some plans were allowed to avoid the ACA rules altogether, then plans competing to enroll the same participants wouldnt be competing under the same rules. Noncompliant plans would likely be structured to be attractive to low-cost enrollees, through fewer required benefits, higher cost- sharing, and premiums that vary by health status.

Higher-cost individuals would tend to want the broader benefits and pre-existing condition protections of ACA-compliant coverage. Rather than having a single risk pool, in which costs are spread broadly, there would be in effect two risk poolsone for ACA-compliant coverage and one for noncompliant coverage. As a result, average premiums for ACA-compliant coverage could far exceed those of noncompliant coverage, thereby destabilizing the market for compliant coverage. The instability would be exacerbated if market rules facilitate movement of people between the two pools (e.g., if people with noncompliant coverage can easily move to compliant coverage when health care needs arise).