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Here's an interesting analysis of the likely effects of Obamacare's imposition of "community rating" and "guaranteed issue" on the nation.

The article calls these two policies "ticking time bombs." Currently, insurance regulations vary significantly among states. It makes an interesting comparison of two state health insurance markets, New York which has these two policies and Arizona which apparently doesn't. Not surprisingly, individual insurance premiums are much lower in Arizona. The article details the health insurance shopping of one worker in his early 40's. The lowest individual policy he could find in New York was apparently $1200 per month. He found a high deductible catastrophic care policy for $100 per month in Arizona. Comparable point of service policies cost $300 per month in Arizona and $1500 per month in New York.

Obamacare would impose New York style regulations on the entire country.

As the article points out, healthy people will logically wait to buy insurance until they are sick since insurers will be forced to sell them policies regardless of health status and at a fixed price:

"The pools of the insured in states like New York and Vermont consist of an extremely high proportion of sick people. (This PricewaterhouseCoopers report describes how the guaranteed issue and community rating could drive up premiums.)

As the old and ill flood the plans, the rates rise even further, pushing out more and more of the young and healthy in a cycle of rapidly rising premiums and sicker and sicker customers."

Obamacare's mandates are supposed to prevent this from occurring but are not accompanied by adequate penalties or enforcement - and face serious constitutional challenges.

So, Obamacare's imposition of these two policies on a national scale would be expected to cause premiums to soar in many states.

Adding insult to injury, the new national regulations remove the incentive for many people, like the worker in the story, to pursue better health for a lower premium.

Imagine if Obamacare had done the exact opposite by pursuing even one free market reform - allowing people to purchase health care insurance across state lines.


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