Under his plan, a person opting out “must file an ‘affidavit of personal responsibility’ with the state exchange. Such a filing will waive their rights to: 1) Enroll in a health insurance exchange; 2) Enroll in Medicaid if otherwise made eligible; and 3) Discharge health care related debt under Chapter 7 bankruptcy law,” DeFazio wrote in a letter to colleagues Tuesday.
Under his plan, if a person wants back into the system, they’d need to buy insurance on their own, out of pocket, for five years. The idea here, and with other, similar plans, is to moot one of the constitutional complaints about the mandate — that it penalizes “inactivity.”
The question is whether tweaks like this will create “adverse selection” in the insurance market. That’s what would happen if the people who opt out are broadly healthier than the people who don’t, and it would cause premiums to rise considerably.
Adverse selection — the idea that young people would simply opt out for a period of five years, leaving the risk pool full of sicker individuals who are more expensive to cover — is just one problem with this plan. The other very obvious shortfall is that if the individual does become sick during the five year period, he or she may have a hard time affording health insurance coverage and will pass on the costs of care to other payers in the health care system.
Again, this is not the time for Democrats to be publicly exploring alternatives to the mandate. Why add more weight to Judge Vinson’s decision finding the mandate unconstitutional? (And for the reasons I outline here). This time would be better spent reminding the public of the GOP’s past support for the policy and how the law benefits seniors and other key demographics.