The revised BCRA includes this change to Obamacare’s “Special Enrollment Periods” (SEPs):
(4) EXCEPTIONS.—Notwithstanding paragraph (3), a health insurance issuer may not impose a waiting period with respect to the following individuals:
(A) A newborn who is enrolled in such coverage within 30 days of the date of birth. …
(internal quotation mark omitted)
This is a change from the ACA, which gives parents 60 days to enroll their kids in health insurance. I asked on Twitter (see thread ending here) what the justification would be for this change. The answer is basically: to avoid parents’ enrolling their kids in health insurance only when they know that the kids have serious illnesses. In this way, it’s of a piece with other policies that try to get a good mix of healthy and sick people into the risk pool.
How would we determine the correct length of an SEP? Zero days — i.e., you must sign your kid up for insurance on the day he or she is born — is clearly too short; parents have a lot of other stuff on their minds on that first day, and it’s unreasonable to expect them to take care of insuring their kids right away. On the other hand, there’s clearly some period of time — a year? Two years? Infinity years? — that’s too long. If we wait too long, we really will encourage people to only enroll their kids when they know the kids are sick.
So what’s the appropriate waiting period? To be clear, I don’t know if this is an economic question; it may be a moral one. And there may be no better answer than “see what the best private insurers do, and mimic them”; people shouldn’t get stingier/more-Draconian coverage just because they’re using a federal program.
I have similar questions about other aspects of the new Republican health-care bills. I’m not inclined to give them any benefit of the doubt, but how about, specifically, their change to age-ratings bands? This is the wonky way of saying: the ACA allows old people to be charged at most 3 times as much as young people; the AHCA increases that to a 5-to-1 ratio. I’ve heard howls of outrage from the left about the 5-to-1 band, and I certainly have a gut moral objection to it: I’d prefer that everyone just be charged the same amount (aka “community rating”). This comes from a place of preferring simple laws (one flat rate is simpler than a variety of rates), and from a belief that the young and healthy ought to be subsidizing the old and sick. That second reason doesn’t really justify a 3-to-1 age-rating band, though: we’re still subsidizing the old and sick with a 5-to-1 band; we’re just subsidizing them less.
But clearly there comes a point when an age-rating band is tantamount to no subsidy at all. A 100-to-1 ratings band would hardly count as a subsidy, for instance. So somewhere between 1-to-1 (community rating) and 100-to-1 (no subsidy) is the optimal (in an economic, moral, or other sense) band. Is there any objective way to determine the correct band?
Whenever I ask a question like this, I’m reminded of this comment by the much-beloved Cosma Shalizi:
our gracious host would really like to be just a little bit to the left of a technocratic center, and to debate those just a little bit to his right about optimal policies within a shared objective function, and pretending that it is a technical and not a political discussion. But because shit is fucked up and bullshit, and because everyone at all on the right has spent forty years (at least) doing their damndest to make sure shit is is fucked up and bullshit, even the smallest gesture in that direction is not so much reconciliation as collaboration. And so our host has sads. (So, for that matter, did Uncle Paul, before he learned to relish their hatred.) The realization that this applies to economists — that much of the discipline is not a branch of science or even of dialectic, but merely of rhetoric (and not in an inspirational, D. McCloskey way either) — cannot come too soon. Whether someone who still assigns Free to Choose to callow freshmen, in 2012, is really in a position to complain about the absurdities of Casey Mulligan is a nice question; but recognizing that half your erstwhile colleagues were always mere ideologists is a step in the right direction.
Maybe looking for optimal (in whatever sense) age-ratings bands is in the same vein.