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View Diary: GOP Shutdown/Default - Latest Updates 10-14-13: Senate Deal Close; Tea Party Barks; Sequester Fight (82 comments)

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  •  The reinsurance tax delay concerns me (1+ / 0-)
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    annan

    I'm not as sanguine as everybody else seems to be about the reinsurance tax delay.  People are acting like it was just a big giveaway to insurance companies anyway, and good riddance, but that's not the whole story.  There is a reason it's in the ACA.

    Some anecdotal evidence and a couple opinion polls notwithstanding, we really don't know what the demographic makeup of first-year Obamacare users will look like.  It's still very likely that the first people to sign up will be sicker and older than the average user from a few years hence, partly because there's more urgency to sign up when you're sick and partly because the penalties for not signing up start out so mild.

    The reinsurance tax subsidies were supposed to provide support to the insurance companies while the individual mandate penalty ramped up and more people became aware of the law.  The policies on the exchanges right now were priced with those subsidies in mind.  If they disappear during the first year when they're most needed, what will happen to the prices of those policies?  It's tough for me to see how they DON'T go up because of this.

    You can say that for much of the health insurance market, the tax would basically be a bookkeeping exercise, since most companies that offer policies on the exchanges also administer corporate policies.  However, there are certainly many corporate underwriters that don't offer HIX policies.  It may or may not be a serious problem, but Senate Democrats need to be very careful and think this all the way through before they do something that will cause premiums to jump.

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