Enrollment in the Individual Market: Moving From Dire Predictions to Promising Early Facts

Over at the Hoover Institute’s blog, Richard Epstein recently offered a scathing critique of the Obamacare rollout, making dire predictions about adverse selection that will lead to a “death spiral.”

[In defending the rollout, President Obama] hasn’t addressed the composition of the applicant pool, which clearly attracts individuals with known healthcare conditions who will receive extensive public subsidies to join the ranks of the insured. There is no way that the government exchanges can remain viable without attracting large numbers of healthy young persons, all of whom are well-advised to stay away in droves, until they become sick and can sign up with the plan of their choice, no questions asked. Obamacare can only remain solvent with an enormous public subsidy.

Today, the New York Times ran a story about the 360,000 Californians that have signed up for healthcare on its exchange, since it opened on October 1.  The early enrollment results seem promising, suggesting that adverse selection and public subsidies are not so problemmatic:

Officials said 18- to 34-year-olds made up 22.5 percent of the nearly 31,000 Californians who selected a private health plan in October. The same age group makes up 21 percent of the state’s population. … People who did not qualify for a subsidy enrolled in significantly higher numbers than those who did. The state reported that 4,852 people who selected a private plan in October were eligible for tax credit subsidies, which are based on income, compared with 25,978 who did not qualify.

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About crobertson

Christopher Robertson is a professor at the James E. Rogers College of Law, University of Arizona, and affiliated faculty with the Petrie Flom Center for Health Care Policy, Bioethics and Biotechnology at Harvard. Robertson also leads the Regulatory Science program, a partnership with the Arizona Health Sciences Center and the Critical Path Institute. Professor Robertson's research focuses on how the law can improve decisions by individuals and institutions -- attending to informational limits, conflicting interests, and cognitive biases, especially in the domain of healthcare. Blending legal, philosophical, and empirical methods, Robertson's work has been published in the New England Journal of Medicine, New York University Law Review, Cornell Law Review, Emory Law Journal, and the Journal of Empirical Legal Studies. He has received research support from the Robert Wood Johnson Foundation, and runs the Law and Behavior Research Lab at the University of Arizona. Robertson graduated magna cum laude from Harvard Law School, where he also served as a Petrie Flom fellow and lecturer. He earned a doctorate in Philosophy at Washington University in St. Louis, where he also taught bioethics. For 2013-2014, he was a visiting professor at Harvard Law School, and will visit at NYU School of Law in 2016-2017. Robertson's legal practice has focused on complex litigation involving medical and scientific disputes.