This is from Bill:
I am worried that the insurance companies will dump bad risks in the
public pool. They can do this by designing plans that have no value to
sick people, the way the do for Medicare Advantage programs. Here's how
you do it: have a high sticker price, but offer discounts for the use
of a gym or health club. (Non-ambulatory need not apply). Or, offer
special benefits to new mothers and well baby programs (over 50 persons
need not apply–unless you're pregnant)
I've been worrying about that for a while and of course there are many more dimensions of quality competition beyond what Bill mentions. It's possible I don't understand the plan well enough and this isn't a real risk. If so, I'd like someone to explain it all to me. (Here is a related post by Matt.) But as it stands I've soaked up all the lessons about how private insurers want to dump the high-risk individuals. Under the reform, if you can't ever cut them off or "resciss" them (is that the verb?), won't you try much harder to avoid them in the first place? Is there some provision in the bill which actually prevents this by regulating quality competition in just the right way? Given that heterogeneous consumers, and employers, choose across plans on the basis of what they want, is such regulation even possible? Right now I'm still worried. Oddly, this is perhaps less of a problem in the states with more concentrated insurance markets.
Of course if there is no public plan these people end up somewhere in the private sector, they just are treated very badly in terms of quality of service. Which makes the mandate an even less good deal for many of them.