An important point re. BCRAP's Individual Mandate replacement

Kurt Busiek is a talented writer and comic artist (and he's apparently pretty famous in the industry...I'm out of the loop on that sort of thing).

He's also a pretty insightful guy. Yesterday he wrote the following Twitter thread:

So the ACA has fines for those who don’t have insurance, which spurs healthy people to buy insurance, which makes things work better. But...

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

…the AHCA is adding a penalty that says if you don’t buy insurance you can’t buy insurance for 6 months. Huh?

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

I suppose what they’re thinking is that it stops people from holding off buying insurance until they’re sick, because this way they can’t...

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

…buy insurance until 6 months after they know they need it, so that’ll cut down on that problem. Because foresight, right? They’ll buy...

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

…insurance just in case, because they can’t buy it at the last minute. Woo, victory. But wait.

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

If these people had foresight, you wouldn’t need to have penalties for them not having to foresight to buy insurance, would you?

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

The whole problem with healthy people not buying insurance because they don’t expect to get sick/injured is that they lack foresight.

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

So a penalty that spurs foresight by punishing lack of foresight won’t mean much to those who lack foresight, because they lack foresight.

— Kurt Busiek Resists (@KurtBusiek) June 24, 2017

This is a really interesting point.

Currently, the ACA has two different types of incentives (or goads, if you prefer) to try and get people to enroll in coverage. One is deadline-based (the limited-time Open Enrollment Period); the other is financial (the Individual Mandate).

Now, there are plenty of criticisms of each. The biggest gripe about the Open Enrollment Period is that there are too many exceptions allowed; that is, insurance companies and ACA critics accused the Obama Administration of being too lenient about letting people enroll during the off-season via Special Enrollment Periods (SEPs). Last year, HHS partly cracked down on this sort of thing by reducing the number of Qualifying Life Events allowing an SEP and by randomly requiring documentation / verification of 50% of those QLEs in order to enroll during the off-season. This year, Tom Price of HHS is cracking down even more strictly on this by requiring 100% of SEP application eligibilities be verified first. I don't know whether this really was a significant problem or not, but either way it appears to have been dealt with.

On the financial penalty side, many people (including myself) have pointed out that the current penalty for not enrolling ($695/adult, $347.50/child or 2.5% of your household income) is simply too low in order to be effective at getting enough people to enroll. Too many people (especially the young/healthy types who are so vital to a balanced risk pool) are apparently deciding that paying a $700/year penalty for nothing at all is a better deal than paying (with tax credits for many), say, $2,000/yeear for a high-deductible plan. Now, personally, I think that's still shortsighted of them, but as Busiek notes above, if everyone thought the way I did, we wouldn't need any sort of penalty/incentive at all, would we?

However, assuming the financial penalty was increased (unlikely, I realize), the point is that there's 2 types of incentives in place addressing two different types of personality: One is deadline based ("get in now before it's too late!"); the other is financial ("sign up or you have to pay a penalty!").

Under the GOP's BCRAP bill, the financial penalty is wiped out altogether...and replaced with a second deadline-based version: Sign up and stay signed up or you'll be locked out for an additional 6 months!

Would this be more or less effective at getting people (again, especially the young/healthy types) to actually do so? Well, as Busiek notes above, the problem is that it might potentially prod more "deadline-based" people to...but would also let "financial-based" people off the hook entirely.

My personal suspicion is that the net results would be that instead of increasing the number of healthy people signing up, it would instead have the result of reducing the number of unhealthy people from signing up. Technically speaking, this would indeed "balance the risk pool" effectively going right back to shutting out the "undesireables". The only difference is that instead of pinning the blame for this on the insurance carriers, the "blame" would technically fall on the enrollees themselves.