The hot heads in Massachusetts were largely responsible for the start of the American Revolution. It is a good thing that went better than the Massachusetts version of health care reform. One of the (many) problems in Massachusetts is the growing number of people playing the adverse selection game. That is, enroll in health insurance only when you realize you will need it.
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Hey guys I was on top of this health care stuff, what happened?
Health benefit plans generally have a fixed enrollment period, generally 30 days annually. Virtually every plan requires a new spouse or dependent to be enrolled in a stated period of time typically thirty days from the event. Why? To prevent the very problem adversely affecting Massachusetts. Even Medicare penalizes you if you are late to enroll.
Here is what a July 7 Op-ed in the Wall Street Journal has to say about this topic:
In a new paper, Stanford economists John Cogan and Dan Kessler and Glenn Hubbard of Columbia find that the Massachusetts plan increased private employer-sponsored premiums by about 6%. Another study released last week by the state found that the number of people gaming the “individual mandate”—buying insurance only when they are about to incur major medical costs, then dumping coverage—has quadrupled since 2006. State regulators estimate that this amounts to a de facto 1% tax on insurance premiums for everyone else in the individual market and recommend a limited enrollment period to discourage such abuses. (This will be illegal under ObamaCare.)
However, a fixed period for open enrollment in a health plan is not illegal under the Patient Protection Affordable Care Act. The Wall Street Journal opinion appears to be inaccurate with regard to the PPACA, subject of course to final regulations on the matter.
‘‘SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE.
‘‘(a) GUARANTEED ISSUANCE OF COVERAGE IN THE INDIVIDUAL AND GROUP MARKET.—Subject to subsections (b) through (e), each health insurance issuer that offers health insurance coverage in the individual or group market in a State must accept every employer and individual in the State that applies for such coverage.
‘‘(b) ENROLLMENT.—
‘‘(1) RESTRICTION.—A health insurance issuer described in subsection (a) may restrict enrollment in coverage described in such subsection to open or special enrollment periods.
‘‘(2) ESTABLISHMENT.—A health insurance issuer described in subsection (a) shall, in accordance with the regulations promulgated under paragraph (3), establish special enrollment periods for qualifying events (under section 603 of the Employee Retirement Income Security Act of 1974).
‘‘(3) REGULATIONS.—The Secretary shall promulgate regulations with respect to enrollment periods under paragraphs (1) and (2).
(6) ENROLLMENT PERIODS.—The Secretary shall require an Exchange to provide for—
(A) an initial open enrollment, as determined by the Secretary (such determination to be made not later than July 1, 2012);
(B) annual open enrollment periods, as determined by the Secretary for calendar years after the initial enrollment period;
(C) special enrollment periods specified in section 9801 of the Internal Revenue Code of 1986 and other special enrollment periods under circumstances similar to such periods under part D of title XVIII of the Social Security Act; and
(D) special monthly enrollment periods for Indians (as defined in section 4 of the Indian Health Care Improvement Act).
Clearly there are many problems with the PPACA, most of those related to uncontrolled costs, cost shifting and the detrimental impact on millions of Americans on Medicare and in private employer-sponsored plans, but encouraging adverse selection does not appear to be one of them On the other hand, time will tell if Congress will change any of the rules if too many Americans go without coverage. Remember, the penalty for n0t carrying coverage is a monthly amount so it is still possible for some people to not enroll in a plan and pay the penalty until the next open enrollment period. Not all health care is an emergency and many elective procedures or treatment can be delayed for months.
QUINNSCOMMENTARY 
