Bad Ideas We’ve Seen Before

By Patrick Appel

On Sunday, Robert Costa floated a new Republican GOP health care plan. Kevin Drum points out that the proposal is nothing the GOP hasn’t proposed a thousand times. Jonathan Cohn focuses on the interstate insurance sales component:

[I]f the GOP were to get its way, scrapping Obamacare and replacing it with the yet-unpublished plan Costa describes, the insurance industry would likely evolve just like the credit card industry did, with carriers relocating to states with the least regulations. That would be good news for healthy people willing to carry bare-bones coverage, and for people with enough money to pay for a plan, would love this arrangement. But people with preexisting conditions, the ones who were only able to buy coverage thanks to the ACA’s rules, would be back to the bad old days.

Bob Laszewski piles on:

A new carrier could conceivably come into the market with much lower rates––because it is offering fewer benefits––attracting the healthy people out of the old more regulated pool leaving the legacy carrier with a sicker pool. Stripping down a health plan is a great time tested way for a predatory insurance company to attract the healthiest consumers at the expense of the legacy carrier who is left with the sickest.

He suggests that “supporters of this idea first ask the leaders of the insurance industry if they would even do this under the best of circumstances.”