The Senate Should Offer a Range of Options to Encourage Continuous Insurance Coverage

[Geee]

Heritage Foundation

As Senate Republicans work on legislation to start reversing Obamacare’s damage to insurance markets, one problem they need to address is the perverse incentive created by two Obamacare mandates.
Those mandates required insurers to accept all applicants and prohibited them from denying coverage for pre-existing conditions.
The problem to address is that the combination of these two Obamacare mandates created a perverse incentive for people to delay obtaining health insurance coverage until they need medical care, and to drop coverage once they have been treated.
Such behavior has occurred, particularly in the subsidized exchange market, with the result that Obamacare has destabilized the market for individual health insurance sold both on and off the exchanges.
Obamacare tried to counter those perverse incentives by offering subsidies to lower-income individuals and imposing a mandate on all Americans to buy coverage.
After three years of experience, it is clear that the mandate approach failed.